Xbox. Introduced in 2001 by Bill Gates, as a way to challenge Sony’s position in the entertainment space, and carve out their own niche in it. While it seemed contradictory to make a console when Microsoft already had an open gaming platform, they proved they could bring innovation in it that forced other companies to follow them.
From online gaming, to achievements, streaming multimedia, cloud gaming, etc, Microsoft really did push gaming forward where Sony and Nintendo were still meandering. But today, Microsoft’s gaming initiative, PC and console alike, is at a crossroads.
Following news that Microsoft is closing four studios in Bethesda, including renowned studios Arkane Austin and Tango Gameworks, there is more rumors of behind the scenes issues in the company. The Verge reports sentiment among Xbox Game Studios’ own employees that they may suffer cutbacks in the same way that Bethesda did.
If you had seen prior financial reports, Microsoft revealed they had experienced record profits in their gaming sector the last quarter, the first one since acquiring Activision Blizzard King. Xbox console sales were down, but metrics in every other sector were up.
While there was talk of only a slight increase in Game Pass numbers, Microsoft did not give any indication that they saw any of these details as negatives. A lot of analysts have made well-reasoned arguments linking them, but only because the company hasn’t said it themselves.
Verge also reports Microsoft’s internal debates on where to take Game Pass from here on in. Apparently, they are considering raising the monthly fee for the service. It’s certainly negative news for current subscribers, but the announcement also comes with the implication that Game Pass is not making enough money for what it is. While its true that Microsoft somewhat absorbs some of the cost of Game Pass within themselves for their first party games, they have also paid dearly for a lot of third party games to be added to its library.
And then there’s Call of Duty. Apparently, Microsoft isn’t sure if they will bring the franchise to Game Pass or not at all. The big issue, of course, is the large amount of revenue that the franchise makes as a full retail price annual title.
It seems logical that having the lion’s share of Call of Duty players on PlayStation means that Game Pass won’t have that huge an effect on Xbox. But, it’s possible that the fear is not that Call of Duty fans will migrate to Xbox, but to PC via Ultimate Game Pass instead. It’s certainly possible that Call of Duty players will make it a habit to buy one to three months of Game Pass to play Call of Duty over the holidays, which is the peak period for casual players, and then cancel and resubscribe again.
There does seem to be a possibility that Microsoft could turn out making more money, or less money, if they give this a try. But they don’t seem to even want to try and see, which reflects a lack of risk taking.
With all that said, we should remember that these are all rumors. It certainly looks like Microsoft’s own employees themselves don’t know the full picture. It’s easy to get carried away into wild speculation, but just because it’s hard to take Microsoft at their word anymore, it doesn’t mean everyone else ‘unofficially’ speaking out knows what’s really happening.
