One of the key pillars of Microsoft's next-generation strategy is Xbox Game Pass, and it could be a game-changer for the Xbox Series X and Microsoft's overall ambition for the future of gaming long-term. Xbox Game Pass is so much more than a catalog of games you can play--it's also the foundation for where Microsoft believes gaming is headed in the future. And with the launch of Xbox Series X this holiday season, Microsoft has a chance to start this next generation on a much stronger footing than the current one and better set itself apart from its competitors.
Microsoft's bold new vision for the future of gaming is rooted in its past. Microsoft came up short against Sony in terms of current-generation console sales. Some estimates state that the PS4 outsold the Xbox One by a 2:1 margin. There are plenty of reasons for that, including Microsoft's hubris around the launch. After a strong Xbox 360 era, Microsoft announced policies around the new Xbox One that fans immediately and loudly rejected, including internet check-ins, a lack of used game support, and bundling Kinect with every system. The console retailed for $500 USD at launch, a full $100 above the price of the PlayStation 4.
In an interview just ahead of launch, I remember asking then-executive Albert Penello about the price gap, and he shrugged his shoulders, appearing confident that it would not make a difference. But it did. Even if some of these digital-centric policies might now be considered by some to be forward-thinking, 2013 was clearly not the time for those ideas to thrive. The Xbox One could never fully recover from its initial launch struggles, but things are different now, and Microsoft is putting itself in a very strong position as it heads into the Xbox Series X era and beyond.
Selling a lot of consoles is good, of course, for bragging rights and revenue, but the real money in games comes from software and services. Phil Spencer, who took over the Xbox business from Don Mattrick, lays it all out in a 2019 interview with The Verge:
"The business isn't how many consoles you sell. The business is how many players are playing the games that they buy, how they play. I think it’s easy from the outside to judge the health of our business around how many consoles any company sells. In the end, how many subscribers you have to something like Game Pass, how many games people are buying, those are much better metrics on the health of the business."
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