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Microsoft’s Halo gamble will be a vital test for the success of Xbox Game Pass

 A screenshot of the upcoming Halo Infinite

This week in Protocol Gaming, your weekly guide to the business of video games: Microsoft lays out the road to launch for Halo Infinite, Naughty Dog co-presidents comment on crunch culture, and China's gaming crackdown continues.

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The Big Story

Microsoft's Halo gamble will be a vital test for the success of Xbox Game Pass

Microsoft at long last announced the release date for Halo Infinite, the most anticipated Xbox game in years and arguably the most crucial new software launch from the company since Windows 10. Yet on Dec. 8, the Halo game that arrives will land as a hybrid release unlike anything the industry has seen before, available in various degrees for free. It will also be basically incomplete.

The new Halo is a big gamble for Microsoft, and it could have a momentous payoff. But the release may be a rocky one. 343 Industries, the internal Xbox studio in charge of Halo, will ship the game after a more than year-long delay which made the game miss its planned launch alongside the new pair of next-gen Xbox consoles.

  • The game is still coming in hot. Infinite won't arrive with the fan-favorite co-op campaign mode Halo players are accustomed to and without its multiplayer editor, Forge, that has helped turn past Halo games into creative hotbeds for player experimentation.
  • 343 said shifting its development team to fully remote during the pandemic affected its ability to ship such crucial features at launch. It called the decision a "really tough" one it felt it had to make to ensure the quality of the campaign and core multiplayer.
  • Microsoft recognizes that waiting until 2022, when new releases from established competitors including Call of Duty and Battlefield will have gained an edge, could doom Halo Infinite for good. So it's pulling the trigger at nearly the last possible moment for a successful holiday launch, a move that didn't pan out well for the bug-ridden Cyberpunk 2077 last year.

Infinite will be largely free for Xbox and PC players. The game not only will have a free-to-play component available to anyone with an internet connection, but also will be part of Xbox Game Pass.

  • If you pay for the $10 or $15 monthly Game Pass subscription, you get the full $60 game for free so long as you stay subscribed. If you don't want to pay a cent, you can still login and play multiplayer. Microsoft is going to rely on microtransactions to earn more revenue.
  • The company hopes by updating Halo with the times and incorporating new business models and distribution strategies, it can achieve the kind of scale and popularity enjoyed only by the largest mobile and free-to-play games.
  • Even the most polished video games still only attract a fraction of the player base of mega-hits like Fortnite, Roblox, Call of Duty: Warzone and the long and growing list of mobile juggernauts from Tencent and its partners.

The release of Halo Infinite offers a road map to Microsoft's vision of the future. Over the last half-decade, Microsoft has rebuilt its struggling image in the game industry and overhauled its business strategy to focus on multi-platform releases and its growing Game Pass platform.

  • The future for Microsoft involves launching games that shift the value proposition away from paying upfront for something polished, and toward helping justify a monthly fee in perpetuity for access to hundreds of titles both old and new and of varying scopes and sizes.
  • Some of those games may change drastically after launch and employ different post-launch monetization models, but they can be enjoyed on a host of different screens, including phones. As a result, Microsoft is changing the economics around funding and distributing these games, both for its own studios and for others that join the Game Pass platform.
  • This is many ways the opposite of Nintendo and Sony's business strategies. Those gaming giants have begun to more closely resemble one another in recent years and represent a safer, more conservative approach to ecosystem-building, reliant on hardware lock-in, first-party franchises and strong unit sales. Halo can still succeed while selling far fewer companies than, say, The Last of Us Part II.

Microsoft's strategy in many ways represents a middle ground between the dominant free-to-play model of mobile and the big-budget, Hollywood-like approach of traditional game development. Through its unique position in both the tech and gaming industries, Microsoft may be the only company capable of pulling off such a balancing act, while its primary competitors are either forced to follow years from now — or get to enjoy the benefits of learning from Microsoft's mistakes.

Few game series have as strong a legacy and carry as many expectations as Halo, making the next installment a fitting proving ground for Xbox's hybrid future. The game will have to hit high marks in all the usual departments, such as the narrative depth of its campaign and the sticky feedback loop of its multiplayer. But Infinite also has to succeed at being a different kind of game to many different kinds of players, all at once. And then it has to keep evolving like the biggest games of today do. It's a tall task for Master Chief, but the future of Xbox depends on it.

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PROTOCOL EVENT

Future of voice

From speakers to phones to cars, voice control has quickly become ubiquitous. How can the entertainment industry craft new voice-powered experiences, what kind of new business models are emerging in a voice-first world and how will voice control evolve in a world with multiple assistants?

On Sept. 9 at 12 p.m. PT / 3 p.m. ET, Protocol's Janko Roettgers will gather a panel of experts from across the industry to discuss what's next for voice. RSVP here.

Overheard

  • "I don't really feel like there's much of a choice about these things. The way things are going is not something I feel like I have control over. You look at what happened with streaming in other media and it's just unstoppable." ―Tim Schaffer, founder and CEO at Microsoft-owned Double Fine, shared his thoughts on subscription gaming services with Gamesindustry.biz following the release of Psychonauts 2 on Xbox Game Pass last Wednesday.
  • "I have definitely personally worked very hard over the years. I think some of that has helped me get to where I am in my career. As a studio, we've all worked hard together, and we are working very hard on every project to find the right balance, just like we do in all of our technical aspects of creating a game." ―Naughty Dog co-president Evan Wells answered a question from Game Informer about crunch culture and burnout in the game industry by largely dismissing the concern. His comments have proved controversial.

Lootbox

  • On Protocol: China on Monday announced a new gaming ban for children limiting minors to three hours per week and only on Fridays, weekends and holidays. The Chinese government is aiming to curb what it sees as a growing gaming addiction among the country's youth.
  • South Korea reversed course on a controversial gaming ban. Just days before China announced its new restrictions, South Korea ended its "shutdown law" banning children under the age of 16 from playing games between midnight and 6 a.m., Kotaku reported. The law first went into effect in 2011.
  • Europe's gaming market saw a boom in 2020. Money spent on video games in Europe soared 22% during the pandemic to €23 billion, Gamesindustry.biz reported. Bucking global trends, a majority of the spending (about 44%) was on console platforms, while mobile accounted for 40% of sales.
  • California expanded its Activision Blizzard lawsuit. California's DFEH has expanded its sexual harassment and discrimination suit against the World of Warcraft publisher to include contract employees, Axios reported last week. The agency also accused the company of shredding documents vital to its investigation, a claim Activision Blizzard denies.
  • Blizzard will rename a major Overwatch character. The studio will rename Overwatch's gunslinging cowboy Jesse McCree after the character's namesake left the company in disgrace as part of its ongoing reckoning with its toxic and sexist workplace culture. McCree, the employee, was named in several news reports as complicit in Blizzard's mistreatment of female employees.
  • Cloud gaming is on track to reach more than 23 million players this year. Gaming analytics firm Newzoo released a new report last week on the growth of cloud gaming services, saying the market is expected to grow to almost 24 million players and surpass $1.6 billion in revenue by the end of the year. NewZoo expects it to quadruple in size by 2024.
  • Microsoft is using its Xbox platform to promote COVID-19 vaccines. Microsoft took to Twitter and Twitch last week with its Xbox handle to promote vaccinations by hosting a live Q&A with the CDC's Dr. Jay Butler and Dr. Judy Monroe.
  • On Protocol: Netflix has launched an early version of its gaming service in Poland, featuring two existing Stranger Things titles from third-party development partner BonusXP. Netflix owns both titles and republished them on mobile under its own name, the company says. Now, Netflix subscribers in Poland can play them for free on Android.

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Look out for

The Deathloop dilemma

Dishonored developer Arkane's much-anticipated new release, stealth action game Deathloop, is arriving Sept. 14 in the unique position of being a PlayStation 5 exclusive from a Microsoft-owned studio. When the Xbox maker acquired Bethesda Softworks parent company ZeniMax Media for $7.5 billion last year, it acquired all of its subsidiaries, including Arkane, and their existing business contracts.

One such deal happened to be with Sony for a timed, one-year exclusivity window for Deathloop. Microsoft is honoring the commitment, likely because it would be rather costly not to. But that means those who don't own a PlayStation console will have to pay $60 to play the game on Steam. Next year, Deathloop will presumably launch on Xbox platforms and become available for Game Pass, too, though Microsoft is not yet speaking up about its post-launch plans for the title.

Thanks for reading. Tell your friends and colleagues to subscribe here, and send tips, feedback and ideas to nstatt@protocol.com. See you next week.

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