In 2013, Microsoft and the Xbox brand are coming off their greatest success with the Xbox 360. While they didn’t technically “win the generation” they definitely owned and were the preferred platform throughout most of it. They had a huge opportunity to capitalize on that with the announcement of the Xbox One and then bungled it hard with awful messaging about Xbox Live Gold online checks, sharing games, being an all-in-one console, and forcing the Kinect into things. Furthermore, the executives in charge then doubled down on that bad messaging and even insulted consumers by telling them to “go buy an Xbox 360” if they couldn’t be online. Thus allowing their main competitor, Sony to benefit and gain an even bigger player base at their expense.
Bringing things forward a little, the PlayStation 4 virtually had little opposition for a large part of the previous generation until Nintendo came out with the Switch and Microsoft began making moves they would have never done in the past. A large part of that should be attributed to promoting Phil Spencer as head of Xbox, as he and the team around him were able to slowly pull Microsoft executives into another direction. Over the period of the last four to five years, Xbox has become a much more consumer-facing company. Looking beyond locking people into just the Xbox One and promoting an ecosystem approach. While also doing whatever they can to move their image away from the horrid one the company displayed at the start of the then, new generation.
The Multi-Faceted Approach
Beginning with the Play Anywhere initiative that allowed for a qualifying game to be purchased on either PC or Xbox One and then getting the other version for free with cross-save included as well. Microsoft made an earnest push into the PC gaming market by making their first-party games available on both Xbox and PC. The company also started playing nice with others by heavily promoting cross-play with Nintendo and mobile platforms to get Sony to eventually do the same. Not to mention, also creating X-Cloud using their Azure technology to potentially expand their base even further into the mobile space.
Now, all of these previous decisions live in one conglomeration called Xbox Game Pass. Where much like the hugely popular video streaming services Netflix and now Disney +, they aim to offer enough content to justify continually asking its subscribers to pay $10 or $15 monthly. The $10 tier gains users access to over 100 games that can be downloaded and played at anytime including all Xbox first-party games available on Day 1. While the $15 tier called Xbox Game Pass Ultimate also includes access to the Game Pass library on PC and Android, and it bundles in Xbox’s online play service Xbox Live Gold into that as well.
Microsoft further cemented that on Friday by attempting to raise the price of Xbox Live Gold by $1 to $10.99 for the monthly rate and by $5 to $29.99 for the three-month rate. Those price increases are totally fine especially for a service that hasn’t raised prices in a long time. However, when it came to the six-month rate the price was moved from $39.99 to $59.99, and the yearly option was removed entirely. Essentially making Xbox Live Gold $120 a year.
It Was Always About Game Pass
The sudden and ridiculous price increase was rebuked by gamers and the media immediately because Microsoft has added no value at all to Xbox Live Gold aside from Games For Gold which has decreased considerably since the invention of Game Pass. Let’s be real here, there really is no way to add value to Xbox Live Gold at this point, and no, spending more money to add more games to the Games For Gold each month, as they did for February 2021, isn’t the answer.
Xbox Live Gold is a function of the past when online gaming was new for consoles and it also offered much more security and stability than the other console providers online methods. All these other things Microsoft has created since then are services and products that push towards the future. Ultimately though, this was the goal of the price increase, to allow people to see the value of Xbox Game Pass Ultimate. Why pay $120 a year or even $11 a month just to pay for an invisible wall that grants you access to online play. When for $180 a year or $15 a month you can get that same online wall, and so much more. Not to mention, Microsoft can tout that they have added a bunch of subscribers after they drop Xbox Live Gold and move to Xbox Game Pass instead. Well, that was the idea anyway. The thing is, there were several alternatives, but Microsoft chose the worst one. Making it feel like “you better subscribe to Game Pass Ultimate or get ready to pay more instead.”
Microsoft should have instead banked on the Zenimax Media acquisition and any further acquisitions they could make, which according to a Eurogamer and others, they are not done with making acquisitions for Microsoft Game Studios. Plus, once the current studios start producing a consistent string of hits that raises their prestige, which also inches them ever closer in garnering the same respect that Nintendo and PlayStation Studios development teams have. And in turn, gamers will see an even bigger value in Game Pass and more subscribers will happen naturally.
If there’s one thing people do not like is feeling forced to do something. This is why completely dropping Xbox Live Gold out of nowhere would have garnered much the same reaction, albeit from a smaller base. There are millions of gamers out there, but there are also thousands of them that only play a handful of games in a given year and do not want to play anything else. I’m sure each of us know at least one person that only gets excited for this year’s Madden NFL, FIFA, MLB: The Show, NBA 2K, Call of Duty, or even just want to play something like Fortnite or Apex Legends with their friends. They do not give a flying flip about some of the best games of the previous years like Desperados III, Control, and Dragon Quest XI S: Echoes of an Elusive Age all hitting Game Pass within the last two months. And they sure as hell do not care about all the indie titles, older games, or lesser-known games that get added to the service each week.
Those same folks do not want to be bombarded with notifications about said additions. They also do not want to open up the Xbox Game Pass app and see all these games on there that just overwhelms them into not playing anything. Xbox Live Gold is simple, like a utility bill that you just pay and then don’t worry about until it comes up for renewal again. It has also been around for 18 years, whereas Game Pass is a new thing that is not necessarily priced the same all around the globe.
What was most upsetting about Microsoft’s decision is how radio silent all of the major players were about it. No big explanation from Phil Spencer or Head of Games Marketing Aaron Greenberg. Just one article on Xbox Wire and that’s it. Just an absolutely baffling decision in every way possible.
Lesson Learned: A Quick Return to Normal
Thankfully, Microsoft was quick to reverse course and walk back the pricing switch for Xbox Live Gold. While also according to Senior Analyst at Niko Partners Daniel Ahmad speeding up the announcement that was coming down the line of removing the paywall for Free to Play games like Fortnite or Warframe. Putting Xbox Live Gold now firmly in line with Sony’s PlayStation Plus and Nintendo’s Switch Online services.
Honestly, Microsoft shouldn’t have done this in the first place, but at least they learned from their past mistakes and listened on two fronts. Something, not every big company does. The thing is, Microsoft eventually has to do something to get the bulk of those Xbox Live Gold subscribers to move over to Game Pass. I noted earlier that there is very little Microsoft can do to add value to Xbox Live Gold at this point, so incrementally raising the price won’t really work either. Perhaps a much slower and friendlier approach would work instead.
Rolling out the Inevitiable: Phasing out Xbox Live Gold
The total removal of Xbox Live Gold is not going to happen overnight and probably will not for a long time. Raising the price of Xbox Live Gold was extremely hollow and quite frankly, just plain silly. Especially, when you are essentially already doing baby steps towards your true goal. Lost in the outrage over the price increase was the addition that if you already have months of Gold prepaid you can migrate them over to Xbox Game Pass for free just by agreeing to subscribe. Once again proving that what Microsoft really wants is to have as many people under the Game Pass umbrella as possible.
So, why not merge those Xbox Live Gold members into Game Pass slowly and by region? Start in the United States and then move it to other regions over time. But you cannot just make this a one week or even one-month quick switch. This needs to be done with quite a few months of lead time in each region. This way people have time to process the change and understand why Xbox Game Pass is the “best deal in gaming.” The price increase made it all too obvious that Microsoft wanted everyone to see Xbox Game Pass Ultimate as this wonderful value. But it is much more about how they went about the decision. Completely out of the blue and without merit. Yes, slowly merging people over is essentially the same thing but you structure your current tiers a little differently to soften the blow.
Put Xbox Live Gold and console Game Pass into the $10 tier. Allowing your current Xbox Live Gold base to have exactly what they had already, but they can also experience the magic of Game Pass on their own. If they’d rather just act like Game Pass doesn’t exist, they could just delete the app from their console Dashboard completely. While Xbox Game Pass Ultimate still exists as exactly what it is. Granting you access to a huge library of games on PC and your phone at no extra cost. Plus, PC will be an even more viable gaming option once it gets X-Cloud at some point this year. Allowing older and less powerful PC’s to play those big first-party releases. Not to mention, the addition from IOS mobile users getting access to the service for the first time once it hits Apple browsers.
Doing things this way, phases out the product you see as an annoying barrier to progress but lets those users gradually understand the reason why you want to get rid of it. Obviously, Microsoft would love everyone to subscribe to Xbox Game Pass Ultimate, but again, what matters is getting people into the ecosystem and letting them have the option to upgrade. It would be like Netflix forcing everyone onto the multi-screen 4K tier because it is simply “the best version of Netflix” even if you don’t have a 4K television.
The Future of Game Pass is Outside the Box
For Game Pass to truly become what Microsoft envisions though, they need to accomplish something Phil Spencer talked about a few months ago with The Verge, and expand Xbox Game Pass beyond traditional gaming spaces. While also providing a major boon for the Xbox Game Pass Ultimate portion of the service. In the interview, Phil Spencer discussed the possibility of both an Xbox app similar to the one currently on Android phones and PC being on Smart TVs and something akin to a Firestick or Google Chromecast that would come bundled with a controller that you could plug into the TV and stream games via X-Cloud without needing anything else except for the subscription. Their competition Google Stadia does something similar to this. But The major difference is, Microsoft offers everything for a low monthly price. And while Stadia has a free version of its streaming service, each game is sold individually making it much more like an online store without a physical component.
Xbox has a great chance to thrive in that space because it behaves very much like the other apps that are already available on Smart TVs. Sign up via a free trial or the usual starting price of $1 for the first month, sync up the controller, pick a game, and start playing. This could open up Game Pass to casual gamers who have decent internet and don’t want to own a console. Game Pass would now be an option for something quick to do while you are waiting for something else. It could also now be an amazing entry point for families that don’t have the means to buy multiple consoles or even a console at all.
Even if say you don’t have a Smart TV, but you could purchase the USB stick and a controller for the combined price of say $99 and play Xbox games on any television you own is an inviting prospect. Retail stores could put this in the same section as Xbox’s more traditional and pricier consoles, or even next to a Roku box or Firestick. This could easily turn the 18 Million Game Pass subscriber base (current as of today’s Microsoft earning’s call) into one much larger than that fairly quickly. Obviously, this isn’t viable for everyone, but it does provide the option of having a cheap (by gaming standards) entry point for Xbox Game Pass and that’s what Xbox needs the most.
Game Pass Could Really Use a Family Sharing System
Something that could also help drive that point home is by providing a separate tier of Xbox Game Pass for families or for playing on multiple screens at once without having to pay for two, three, or even four separate Game Pass Ultimate subscriptions. There are so many of us that have grown up with video games all of our lives. Guess what? Many of us gamers are also parents that have children, (myself included), who also love video games. If Nintendo can figure out a way to offer a family pass, so should Microsoft. There’s nothing more off-putting than looking at a bank statement or online checking account and seeing multiple charges for the same thing. Opening up Game Pass to a wider audience also means you need to make things as simple as possible. Having one plan that allows for Xbox Game Pass to be played on say up to three screens at once for a discounted price is so much easier for someone to understand than telling them “nope, you have to pay for three full-price Game Pass Ultimate subscriptions to do that.”
Considering we now live in a world where some third party publishers and even Sony themselves are increasing the price of major game releases to $70, providing an inexpensive gateway to enjoying video games by an entire family would be a great marketing tool to have at your disposal. Especially one that can be enhanced even further and reach even more potential gamers with increases in technology. Combine that with a Halo Infinite and more fantastic games from Microsoft’s own studios and it could change the way many think about gaming. Where it does not necessarily have to be this super expensive hobby.
However, for any of this to even be a possibility, Microsoft needs to continue to keep making good decisions. Decisions that give both current gamers and potential gamers a variety of options.