Xbox Founder Ed Fries Says Game Pass is Great for the Customer, But Might Not be Great for the Industry - News
by William D'Angelo , posted on 01 June 2022 / 3,532 Views
Ed Fries, the person who led the team that created the original Xbox at Microsoft, in an interview with Xbox Expansion Pass podcast discussed multiple topics, including Xbox Game Pass.
He says Game Pass is a great service for the customer, but it might not be great for the industry as a whole as he compared it to Spotify.
"The one thing that they are doing that makes me nervous is Game Pass," said Fries (Transcribed by VideoGamesChronicle). "Game Pass scares me because there is a somewhat analogous thing called Spotify that was created for the music business."
He added, "When Spotify took off it destroyed the music business, it literally cut the annual revenue of the music business in half. It has made it so people just don't buy songs anymore. People don't buy songs on iPhone for example, because why would you? They are all on your subscription service app. Apple said they are going to take away buying songs because no one's buying them any more.
"So we have to be careful we don't create the same system in the game business. These markets are more fragile than people realize. I saw the games industry destroy itself in the early 80s. I saw the educational software business destroy itself in the mid-90s. They literally destroyed a multi-billion dollar market in a few years."
"Game Pass makes me nervous," he continued. "As a customer, I love it. I love Spotify as a customer: I have all the songs I'd ever want. it's a great deal as a customer. But it isn't necessarily great for the industry."
Fries did say that there was a point that everything in the music industry had to be on Spotify, but Game Pass is far from that point as the "percentage of all games that are on Game Pass is still tiny, and there are a lot of games. 200 games a week come out on Steam and more than that come out on mobile."
Microsoft announced in January of this year that Xbox Game Pass has grown to over 25 million subscribers.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
More Articles
Big difference here though is that not every game on the Xbox platform is on Game Pass and most likely never will be. Only like a quarter of all Xbox games are actually on Game Pass, if that. Whereas services like Spotify, every single song is tied to the subscription service. It would be a nail in the coffin if Xbox forces every developer to go onto the service.
For sure, but there's still hundreds if not thousands of other games on Xbox that are not part of Game Pass. The subscription model, on paper, is the same as Spotify and Netflix, but accessing the content is not. You can't access anything on Spotify or Netflix without paying the subscription. On Xbox, not only do you have the option to buy every single game on the platform, but it's only a small portion of games on Xbox that are a part of Game Pass. Which of course, MS first party games is the biggest selling point. Especially when Activision Blizzard come on board.
So, it really seems like Fries is overstating it.
We also get third party games brand new on day one. Not a but there's quite a few and it's a varied in terms of type of game. Plus we also get EA games which is pretty good.
It also includes lot of new indies and some have been pretty good not a big fan but because they are on gamepass I got To try a few
Um Spotify is free but get ads. That's the only thing if u choose to not pay for premium. But u get any music for free there.
Gamepass is so cheap that emanyone can afford it since the 1 dollar is still available
And we know this since ever.
lol at people arguing with this guy. This guy's an industry insider and hes got a point if you even read his comments and think. It takes like $100-500million to develop a AAA game. The economics just doesn't work with Gamepass.
Except... 45% of that 375mil total revenue is operating costs for servers, customer service, gerneral expenses. And then on average paying 10-20million for each game in GamePass's catalog. You are missing a lot.
Microsoft is obviously footing the bills with the goal of dominating the streaming market in mind, become the Netflix of gaming. The problem is if they don't capture the majority of the marketshare, the economics just fail.
Sony already turned that into reality by changing into a GamePass model, they are now the leader with 47million subscribers.
You are also missing micro transaction revenue and regular full retail sales; its also for revenue for one month and Microsoft plan is to release 1AAA per quarter. Using the 55% remaining x 375 million x3 month = 600 million revenue from gamepass for AAA games + micro transaction and retail revenue. ActivisionBlizzard acquisition really change the economic and Microsoft is probably counting on growing Gamepass to 50 million subscribers with this acquisition.
I absolutely agree with this assertion. Not only have services such as Spotify taken over the music industry and caused lowered profits, but music has since become even more "industrialized" as I like to put it. Though the music industry has emphasized manufacturing giant hit pieces for marketing since before the 90's, it is an even larger problem today due to the lower profit margins and emphasis on individual listens. Music is now tailor made for things like parties and less for artistic exploration. An album like Dark Side of the Moon would never be fully appreciated in our current landscape because that album is one that is designed to be listened to front to back.
No offense intended for those who like modern music, but when people keep using Netflix and Spotify as reasons why Gamepass will be successful I just think of industrialization and mass consolidation, both of which have happened to the music industry and the TV/Movie industry and is currently happening to the video game industry.
TLDR: "Old" guy complaining about modern music
I think that the quality argument is incorrect. Maybe the perception of quality due to presentation, which has been built up through knowledge. Decades ago filming and storytelling techniques were very different. Similarly, video games have far more funding poured into them today than they did back then, and comparing games across generations can be jarring, but making a definitive claim on the quality is just too difficult when you aren't taking it within the context of the time period.
Better yet, let's compare the quality of recording for artists. I think we can all agree that, with improved technology and understanding of recording techniques, even a small three person team with an eight input interface can make a singer songwriter sound professionally recorded in comparison to what someone could do with an eight-track back in the 90's. However, the quality of the art itself is not necessarily improved.
Quality of music changing now compared to the 90s
has nothing to do with Spotify. Its because of how generation has changed since and how much pc the world has be come.. That's why modern music are terrible compared to how itt was in the 80s and 90s. I agree with vamatt that netflix and subscription like it has improved the the TV and movie scensrio
I think your music example points to why the model is, at least in part, responsible for the relative increase in quality.
Distribution is now super easy. That's not something that a small artist or small record label has to worry about anymore. So, their efforts can be concentrated on making the music, including the production and recording quality, as good as possible.
This is absolutely true. Any time people try to say streaming killed TV and movies I just think back to Ricky Gervais at the Golden Globes joking about how they should change the show to “Good job Netflix” because Netflix was winning everything.
Not only is there way more quality stuff than ever but you see riskier shows get made because these streaming companies know they can put it in their services and use them to drive subscriptions.
Look at Severance, an amazing show, and it only got made because Apple was desperate for content for their service. No one else wanted it.
Downvote away, console warriors ?
Don't have to do anything to trigger them these days.
I can see that, though the music business was already on life support when Spotify launched,, so that isn't a fair analogy. On the flip side, video games were doing better than they'd ever done in their history when Gamepass came out, so in many ways, if could end up being far worse than Spotify, since it really wasn't needed in the first place.
I guess we'll just have to wait and see.
I get where he's coming from, but unlike music, gaming gains revenue from many different avenues and platforms. Gaming revenue has only continued to grow each year, including Xbox's revenue, regardless of the success of Game Pass and other gaming subscriptions. Unlike Spotify, the vast majority of games do not launch on a subscription service so I just don't see how Game Pass could realistically reduce gaming revenue as a whole.
I agree to disagree. Gaming is more similar to softwares than to music or movies. You interact with games while playing with them. With music or movie, besides listening and watching, you can't do much.
The interactive aspect opens new revenue streams for gaming which includes official mods, expansion for one and done kinda single player games, item store, battle pass etc. for multiplayer games.
In game non-intrusive ads which can be billboards, interactive product placement for otherwise generic item in games etc. will be another way of earning money. (Games that promote intrusive ads needs to die)
I mean even FREE to play games like Fortnite earn more money than most paid games, albums and movies.
So, games are immune to the weaknesses that music and movies as a medium possess.
And most softwares are already dead and have moved on to highly successful services model.
Educational softwares which transformed or launched with a subscription model are thriving like Duolingo, Chegg, Coursehero, etc.
Gamepass is great, I'm playing through lots of content for very little out goings.
If u like the game on gamepass u can by it digitally or physical copies. That's
What I do.
If he doesn't want to replay a game why would he start playing it for free and them buy it to finish while still being able to play it for free?
Some people do that. There are people who like to own physical game and not own digital. Therefore gamepass is used to trial games to see whether its worth the purchase.
I know some people do it. I asked about method114 specifically. Seems like you didn't even read what he wants and just pushed for GP anyway, same as when Sega123 was complaining about how expensive was to keep 4 platform and buying the exclusives to enjoy and someone suggested GP as a solution (how would he play Nintendo or Sony exclusives on GP? And how would that solve the portion of he not liking to play Tekken and some other games online on Xbox?).
I did. Hes referring as if he plays the game to completion on gamepass. That's different. Don't see sega123 post.
Well suggesting gp to save cost is a gd advice as u have one less platform to buy exclusives. So the answer to that person question. But if that person what's to only play tekken for example then he wouldn't get gamepass.
Seems like you really didn't read his point. He said he uses GP to play a game to end and won't replay it. So what reason would he to play it for trial and them buy the game that he could finish for free?
SegaHeart (dunno why I thought was 123) wants to play the exclusives, so sub to GP wouldn't solve that at all since he would still need to buy PS and Nintendo HW and games. And on Tekken case he doesn't want to play it multiplayer on Xbox because for some reason he hates the Tekken community on Xbox. Ashadelo was the one that suggested he go GP. https://gamrconnect.vgchartz.com/post.php?id=9375694
Not even PC titles get release for 10 bucks, what are you talking about?
There is a major difference between a game after 2 years going to GP and that giving a new breath of sales to the title (and DLCs that aren't given away on GP) versus going day one. To think the game will sell more being day one on GP than not being in GP is very odd.
I agree with you Don. I just don’t see why nobody get’s this!!! Sony will never go this route. They have AAA titles that actually sell through the roof. Why throw money away??? No AAA game should ever be released day & date on a gaming service!!!
