The recent launch of Xbox Game Pass reveals that Microsoft is betting that its future lies in online services and digital content. Back in 2013, Microsoft touted a digital future for videogames when they revealed the Xbox One. It was met with much distaste at the time. However, things have changed and more video game consumers are jumping aboard the digital and online bandwagon. Here are six reasons why Xbox One is now pushing forward its initial online and digital vision.
1 – Best Rated Online Platform
IHS Markit conducted multiple benchmarks comparing Xbox Live and PlayStation Network services in the US and UK giving the nod to Xbox Live. The study showed that Xbox Live beat out PSN in faster login times, game loading times and stability, while PSN won for match making. Microsoft will play to their strengths, allowing digital content and services to sparkle on their network.
2 – Higher Demand for Digital Videogames
Videogames market research firm, NPD, recently said the last three years saw a jump of digital sales by 20%, amounting to 74% of total videogame sales in North America in 2016. Microsoft foresaw this trend and reacted by doubling down on its online infrastructure with recent stability updates, Xbox Play Anywhere service and regular digital game sales on Xbox Live.
3 – Forward & Backward Compatible Games
In 2015, Microsoft announced a slew of Xbox 360 games will be backwards compatible on Xbox One during this E3 presentation. Currently, there are 386 Xbox 360 backward compatible games as of time of writing and expect this number to go up. Furthermore, Xbox head Phil Spencer confirmed that all current Xbox One titles and Xbox 360 compatible games will be forward compatible with their up-coming Xbox Scorpio as well as all current Xbox One controllers and peripherals.
4 – Game Pass
Xbox’s push towards digital videogames and backward compatibility have culminated in the recently launched Xbox Game Pass, which is the console’s “Netflix”-esque service launching with 100 Xbox One and Xbox 360 titles. Xbox Live Gold members can now begin a trial period and the service will be available to all users on June 1. Similar to EA Access, Xbox Game Pass offers gamers an extensive games library that will only increase with time for a monthly subscription fee of $9.99. It does indicate that Microsoft seeks further monetize online services business model, while providing consumer-friendly choices. In addition, Phil Spencer does envision Xbox Game Pass as a viable service for future original episodic content, but provided no further details.
5 – Videogame Streaming
In 2016, Microsoft acquired streaming service Beam start-up from 18-year old Matt Salsamendi. Beam, recently renamed as Mixer, rivals Twitch for its game-streaming content, and has one of the lowest latency streams available. The acquisition supports Microsoft’s growth strategy in Xbox Live as well pushes towards gamer-created content for supporting esport competitions, publicity and social interactions. Mixer has already been seamlessly integrated into Xbox One, where any user can begin broadcasting quickly. Now that Xbox gamers can create public tournaments on their consoles, expect Mixer to play a bigger role in social and competitive gaming interactions.
6 – Long-Term Multiplayer Game Revenue Models
Agree with him or not, Phil Spencer’s recent comments on the current status of the videogame industry provides insight of his future plans for Xbox. One of his arguments was the advent of multiplayer games and the many post-sale services they offer through DLC and microtransactions. It’s no surprise that this generation’s biggest titles such as Overwatch, Grand Theft Auto V, Destiny and Call of Duty remain relevant for longer periods of and contain microtransactions and/or DLC. Game development budgets are ballooning and developers have to recoup their costs via additional content, microtransactions and other means to stay afloat. However, companies like EA have recently changed their policies by scrapping paid DLC for Battlefront 2 in order to keep the game’s community undivided to sustain customer engagement. Microsoft has taken note with its own hits like Halo 5 and Gears of War 4 incorporating microtransaction models with free additional content allowing revenues to be collected way further down the line compared to single player games, which often see a steep drop off in price and engagement weeks after their initial release. While Xbox One’s 2017 lineup appears thin compared to previous years, there is a clear push for multiplayer for its upcoming titles. Games such as Sea of Thieves, Crackdown 3 and State of Decay 2, which will have extensive multiplayer content to keep engagement high.