So I'm watching through StopSkeletonsFromFighting's
Xbox 360 super-video (this was one of the best series of vids on 360 documentaries before Power On hit), and in the part about HD-DVD/Blu-Ray, there's a VERY interesting quote from Michael Bay (yeah, that one) about MS's long-game with that format. See if you can spot any parallels:
What you don't understand is corporate politics. Microsoft wants both formats to fail so they can be heroes and make the world move to digital downloads. That is the dirty secret no one is talking about. That is why Microsoft is handing out $100 million checks to studios just to embrace the HD DVD and not the leading, and superior Blu Ray. They want confusion in the market until they perfect the digital downloads. Time will tell and you will see the truth.
Those were words from over 12 years ago, but tell me that doesn't sound eerily similar to what Microsoft are doing today with GamePass. Keep in mind (and I had to watch the video to remember this), Microsoft actually made arguably the first big push for digital downloads of movies & TV content on the 360...way back in 2006! This was years before the XBO and TV TV TV!, years before other services offered similar, years before Netflix switched to a digital model. Microsoft were already envisioning this as far back as
2006.
And, well, we see where the market is now when it comes to shows & film. Ironically the download-driven model Microsoft wanted to push was superseded almost immediately by cloud streaming of media content, but what's interesting is that Microsoft already knew that the HD DVD format was a dead horse in 2006 & 2007. Yet, they did a huge marketing push later on anyway just to prolong that format war. Just long enough to hopefully prevent any full cementing of Blu Ray as a standard before the advent of digital media downloads (at least as what MS envisioned), something they were ready to push full force with XBO.
Now, I don't think Microsoft sees GamePass the way they saw HD DVD. They genuinely believe in GamePass as the subscription model of the future. It's not some insincere thing like it was with HD DVD. However, it can be argued that the rights people would trade away going into a subscription model make it less attractive from a customer rights POV than the current model which currently dominates (direct sales), and that for publishers a subscription model makes less sense for Day 1 AAA releases or even a lot of AA or indie releases, hence why MS have had to buy up exclusivity for games to release in the service Day 1, and why, they would argue, it's necessary to just buy publishers altogether.
However, if trends repeat themselves, I'm willing to bet that Microsoft gets so caught up in trying to push GamePass and their version of subscription gaming as the future, that they completely miss out on the actual future of the industry's business model (whatever that turns out to be) and end up LTTP. Look at what happened with them and the shift to smartphones & tablets away from PC, or digital multimedia consumption not coming through direct downloads tied to a specific hardware's marketplace, but hardware-agnostic streaming services (Netflix, Disney+ etc). Or thinking that live TV integration & interactive enhancement was the future when it wasn't. Or lack of earlier investment in mobile gaming when it mattered.
Microsoft, IMO has a track record where they are so proactive in certain investments they deem to be "the future" that they end up having to be extremely reactive to what turns out to be the actual future of a given space. They struck gold with Windows and Azure, but their luck with Office came mainly thanks to Windows profits they used to weather out competition from other competitors like Lotus who eventually just ran out of money and had to fold. And, arguably, their growth with Azure was thanks to their Windows profits, but that's off a product they pulled off a big win in the '90s with, even if it was built off an OS they mostly lucked their way into market dominance with the decade prior.
So what are the chances that Microsoft ends up missing the forest from the trees with their version of a services-driven gaming future? Pretty high, actually, and that's even considering they do end up acquiring ABK. Personally I think the GamePass model, and Microsoft's vision for a subscription/services-driven future, isn't really compatible with the wider market. Companies like Sony will eventually have to genuinely find a form of that type of model into their stuff, their Day 1 releases, sooner or later, and I'm curious to see what they come up with.
Personally, I would just take an ala carte, per-game sub model route. It strikes a good balance, it can be implemented with purchased or cloud instances, it can be hardware-agnostic, and still guarantee healthy revenue & profit margins. Also allows for more customer spending flexibility, which is going to become increasingly important as time goes on. I still think Microsoft have a leg-up in terms of cloud capacity due to Azure, but it's not like they're the only option for cloud, and their model could be driven by too much vertical integration to actually end up working.
