Should Xbox Game Pass See Red Flags In Current Netflix-HBO Max Chaos?

Games Should Xbox Game Pass See Red Flags In Current Netflix-HBO Max Chaos? Paul Tassi Senior Contributor Opinions expressed by Forbes Contributors are their own. News and opinion about video games, television, movies and the internet. New! Follow this author to improve your content experience.

Got it! Aug 4, 2022, 09:41am EDT | New! Click on the conversation bubble to join the conversation Got it! Share to Facebook Share to Twitter Share to Linkedin Starfield Bethesda It’s a chaotic time in the entertainment industry, and it’s being deemed a new Hollywood era of “austerity” after years of unchecked spending. We’re seeing the manifest in a few ways, but namely with two major streaming services, Netflix and HBO Max. Netflix has been struggling to impress investors as it appears to be approaching market saturation in many regions, and its content spending has ballooned to the point where it now cannot keep just auto-greenlighting everything, and is starting to have to think about major cutbacks, which have already included a number of layoffs at the company.

HBO Max, despite being universally thought of as a pretty successful and well-liked streaming service, is about to be gutted by new WB management, who are trying to climb out of a $55 billion debt hole with at least $3 billion in cuts, which includes entire movies and likely a number of shows that are about to be axed , regardless of their success. This has gotten me thinking about Xbox Game Pass, easily the most prominent subscription service in the gaming industry, and the closest thing to the “Netflix of gaming” we’ve gotten. In many ways it does feel like the early days of Netflix, a beloved service that millions want to sign up for, full of instant access to huge AAA games and smaller indies alike.

Xbox Game Pass MS MORE FOR YOU ‘Demon Slayer’ Season 2 Finally Has An Actual 2021 Release Date Netflix’s ‘Squid Game’ Season 2 Not A Sure Thing, Says Director ‘Genshin Impact’ Still Refuses To Increase Anniversary Rewards, Despite Fan Outcry Right now, Microsoft is the only major publisher that is comfortable using a subscription service to launch massive new games on day one. While we’ve seen some other brands dabble in this like Ubisoft and EA, though not to the same extent, while others like Microsoft’s direct rival Sony, have rejected the model outright, saying that it does not make sense for them to release games that way. Here’s Sony’s Jim Ryan on why they’re not doing a PlayStation Game Pass: “[In terms of] putting our own games into this service, or any of our services, upon their release.

. . as you well know, this is not a road that we’ve gone down in the past.

And it’s not a road that we’re going to go down with this new service. We feel if we were to do that with the games that we make at PlayStation Studios, that virtuous cycle will be broken. The level of investment that we need to make in our studios would not be possible, and we think the knock-on effect on the quality of the games that we make would not be something that gamers want.

” You may see the connection I’m starting to form here, where the issue is the same as the one facing these TV/movie streaming services. The idea of spending massive amounts on content that must be offset by huge subscriber numbers is starting to appear unsustainable, at least at current levels, which has resulted in a huge amount of debt for both Netflix and HBO Max. It was accepted for a while, but years later, has now become untenable.

Here, Sony makes the case that they’d rather sell tens of millions of copies of a must-have AAA game at $70 apiece rather than put it on a Game Pass service, which is what Microsoft is doing. It’s the equivalent of releasing a movie in theaters, or debuting it day one on streaming, which is what HBO Max did for most of the pandemic. And now you can see where that has led.

Wonder Woman 1984 WB Even if it is hard to be convinced that Xbox Game Pass can grow to constantly sustain the budgets of all of Microsoft’s massive game projects like Halo Infinite, Redfall, Starfield, Gears of War, Forza, Perfect Dark, Fable and more, the situations are not exactly equivalent. As Xbox execs have referenced before, they’re a part of Microsoft, which is quite literally one of the largest companies in the world, and they are potentially better suited for the high cost of such an endeavor over the long term than these entertainment brands we’re talking about (or Sony, which is in both markets). Microsoft has a $2.

1 trillion market cap. Netflix has a $100 billion market cap. Warner Bros.

Discovery has a $40 billion market cap. Microsoft has a warchest that cannot be matched by essentially anyone else in the industry, streaming or gaming, other than perhaps Apple and Amazon (see Amazon’s upcoming billion dollar LOTR show). Microsoft also gives players the ability to permanently buy games off Game Pass, and earns money from DLC and microtransaction sales within those games, additional revenue streams that media streaming services don’t have.

The fact is, it’s still pretty early in this new Xbox Game Pass era, as we have not had all that many AAA releases on Game Pass with some of the biggest and most anticipated titles after all the new Xbox studio acquisitions still to come. But I do not think it’s unreasonable to at least look at the problems these other services have had dumping billions into content while struggling to make subscriptions pay for it all. We’ll see what happens, but it’s going to take years to fully play out.

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