Microsoft is making Game Pass too big to ignore
Hi, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Tuesday, we’re discussing the multiplatform approach to Xbox’s big Not-E3 press conference on Sunday, Neal Stephenson’s thoughts on the link between AR/VR and the metaverse and Microsoft’s unprecedented embrace of labor organizing.
Game Pass is evolving past the Xbox
Microsoft's Xbox and Bethesda showcase on Sunday capped a week of game announcements that took the place of this year’s E3. Yet while the game industry’s big marketing extravaganza has traditionally been dedicated to hyping single-player console games and platform exclusivity, Microsoft’s showing over the weekend was less about Xbox and more about the ever-increasing perks of subscribing to Game Pass, no matter what platform you’re on.
Game Pass perks now extend beyond the console. One of Microsoft’s biggest announcements on Sunday had nothing to do with console gaming, instead catering to PC players and the chunk of Game Pass subscribers who pay $5 extra per month for access on both Xbox and Windows. Even mobile fans were thrown a bone.
- The company partnered with Riot Games to bring the developer’s full suite of competitive titles to Game Pass. Those games won’t be available to Xbox owners; instead, Game Pass subscribers get perks like a fully unlocked Valorant roster and all champions on mobile hit League of Legends Wild Rift.
- The Riot deal shows the role such free-to-play games might play in helping Microsoft boost Game Pass subscriptions outside the standard exclusivity strategy.
- “It does suggest a more mobile/cloud-only focused version of GP is on the cards,” tweeted analyst Piers Harding-Rolls, who suggested an ad-supported version of Game Pass could also be viable.
- “What's quite interesting to me is the experimentation around new experiences and perks for Game Pass subscribers,” wrote analyst Daniel Ahmad, who said Microsoft is now “building a service that goes far beyond console gamers.”
Microsoft more than made up for unexpected delays. The Sunday showcase was almost overshadowed by a pair of delays for Bethesda’s Starfield and Arkane’s Redfall last month. But Microsoft had a few tricks up its sleeve, and it paid off.
- The company secured Game Pass publishing rights to Team Cherry’s Silksong, the hotly anticipated sequel to indie darling Hollow Knight. Once thought to be a Switch exclusive, the game is now releasing sometime in the next 12 months, Microsoft confirmed.
- While the deal isn’t closed yet, Microsoft’s closer relationship with Activision Blizzard meant the Xbox event featured a reveal of Overwatch 2’s early-access release date in October and the confirmation of an all-new hero. We’ve yet to see what perks Game Pass subscribers might get for the team shooter.
- Even if Starfield won’t be releasing later this year, Microsoft showed the first-ever gameplay for the space RPG, giving fans a much-needed look at character customization, combat and other elements. Starfield will be the biggest first-party Game Pass exclusive since Halo Infinite.
Gaming has gone multiplatform. While Sony resisted it for years and Nintendo still refuses to embrace mobile or PC, multiplatform release strategies are fast becoming the norm even for major first-party releases.
- Sony didn’t host a major press conference of its own this year, but it did have a 30-minute State of Play presentation and also dedicated a chunk of time to The Last of Us franchise during Summer Games Fest.
- The big takeaway during both: More PlayStation games are coming to PC, including a remake of TLOU and both Spider-Man games.
- Microsoft dedicated a big chunk of its showcase on Sunday to Diablo IV, a game that primarily caters to PC players. The company also showed off Minecraft Legends, a new game from developer Mojang that will launch on PlayStation, PC and Nintendo Switch in addition to Xbox consoles.
- One of the more curious announcements during Microsoft’s event was a special appearance from Metal Gear Solid and Death Stranding creator Hideo Kojima, who said he’s working with Xbox to develop a first-of-its-kind cloud game. While details are virtually nonexistent, it’s safe to assume Kojima’s cloud game won’t be restricted to any one platform, except maybe Game Pass.
— Nick Statt
“It's not clear that your broad based audience wants access to many hundreds of games in a month and is willing to pay for them. It is possible that a small subset of the audience wants that, but I don't think it's a broad base, because it's not how people tend to consume interactive entertainment.” — Take-Two Interactive CEO Strauss Zelnick expressed skepticism in the long-term viability of subscription gaming, at least in the format Microsoft is promoting with Xbox Game Pass, during a GI Live event.
“We fluently navigate and interact with extremely rich 3D environments using keyboards that were designed for mechanical typewriters. It's steampunk made real. A Metaverse that left behind those users and the devs who build those experiences would be getting off on the wrong foot.” — Author Neal Stephenson detailed his thoughts about the role AR and VR might play in the early building stages of the metaverse in an insightful Twitter thread.
A MESSAGE FROM APPDYNAMICS
Full-stack observability with business context enables companies to digest IT performance to easily identify where they can prioritize performance and tackle issues that strategically impact their bottom line. This correlation of technology and business data allows IT leaders to make smarter, strategic decisions based on actual business impact.
In other news
Microsoft partners with Samsung for a Game Pass app. Ahead of its Xbox showcase, Microsoft announced a deal to bring Game Pass to the electronics giant’s smart TVs later this month.
Neal Stephenson enters Web3. The author who coined the term metaverse now has a Web3 venture called Lamina1 dedicated to helping bring the idea to life, alongside Bitcoin Foundation co-founder Peter Vessenes.
Sony turns up the subscription heat. The revamped PlayStation Plus launched yesterday, featuring more-expensive tiers bundled with a suite of older games, including some PS5 exclusives and hundreds of classic games for a total library of over 800 titles.
The fall of the Overwatch League. An in-depth report last week from Bloomberg detailed the turbulent history of the Overwatch League and the uncertain future of Activision esports as Microsoft prepares to acquire the company in the coming year.
Kojima reassures PlayStation fans. Hideo Kojima’s independent game studio has clarified in public statements that the team is still on good terms with Sony after discussing its new cloud game collaboration with Xbox on Sunday.
Google may open up YouTube ad sales. The company is reportedly in talks to let competitors place ads on YouTube to avoid a hefty EU fine.
Spotify has acquired synthetic voice startup Sonantic for an undisclosed amount. The London-based startup previously re-created Val Kilmer’s voice for “Top Gun: Maverick.” An intriguing acquisition, especially considering Spotify’s plans to enter the audiobook business.
Netflix will keep binging alive. The streaming service will continue to release entire seasons of shows at once, according to Netflix content exec Peter Friedlander.
Microsoft opens the door to unions
It’s been an eventful two weeks for the burgeoning labor movement in the game industry, and the flurry of activity is thanks largely to a pair of commitments from Microsoft unlike anything we’ve seen in the technology or gaming sectors to date.
On June 2, Microsoft vowed not to stand in the way of labor organizing from its employees, including at future subsidiaries like the game studios of Activision Blizzard, which Microsoft is in the process of acquiring for nearly $70 billion. On Monday, the company went even further, saying it had entered into a unique partnership with the Communications Workers of America that means it’s now legally bound to stay neutral on unionization, a stark contrast to competitors like Amazon and Apple that are openly fighting employee organizing efforts.
Just a few days prior to Microsoft’s announcement, Activision Blizzard for the first time recognized a CWA-represented union of quality assurance testers at subsidiary Raven Software (the first such union at a major developer in the U.S.) and said it would begin a contract bargaining process. Microsoft and Activision Blizzard say they’re not collaborating on this front, but both companies clearly want the acquisition deal to sail past federal review; the FTC is in the process of evaluating it.
But regardless, the tides are starting to turn and the once-unthinkable process of unionizing the game industry has made major advances in an alarmingly short span of time.
— Nick Statt
A MESSAGE FROM APPDYNAMICS
Organizations that have already started the move to a full-stack observability approach are seeing results and clear return on investment (ROI). In the AppDynamics research, 86% of technologists reported greater visibility across their IT stack over the last 12 months when implementing full-stack.
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