Can Xbox Game Pass destroy the industry? For a former Microsoft, yes

Can Xbox Game Pass destroy the industry? For a former Microsoft, yes

Can Xbox Game Pass destroy the industry? For a former Microsoft

If Xbox Game Pass works for many players and analysts, there is a former Microsoft who absolutely does not share the vision of the Redmond house for gaming. The figure we are talking about is called Ed Fries and he was vice president of the brand dedicated to video games of the company founded by Bill Gates. Fries is a well-known figure in the field of video games, so much so that he contributed to the launch of the company's first console back in 2001.

During an interview in a podcast dedicated to the world of Microsoft gaming, Fries said that Xbox Game Pass makes him nervous and could lead to an outright collapse of the industry. “It scares me a lot, because we've seen something very similar before, which is Spotify. When the Swedish service took off, it destroyed the entire music business, ”Fries said. What the former Xbox vice president means is about revenue, which is the earnings of the music industry. "The industry’s annual earnings were cut in half and made it possible to stop buying songs," added Fries.| ); }
In one respect, the former Microsoft executive's analysis can be very shareable. Now that Xbox Game Pass has become the real hub of the Redmond gaming business, the long-term effects of this business strategy cannot be known. Room for fears, therefore, but no alarmism: the fate of entertainment is still unknown to most and no one can make accurate predictions.

Former Xbox Vice President Worried Game Pass Could Hurt The Industry

Ed Fries, the former Microsoft vice president of game publishing who launched the original Xbox, recently appeared on a podcast where he discussed some concerns he has regarding Xbox Game Pass. Fries said that he’s “scared” that the service could lead to a future in which folks stop buying games, opting instead to just pay for a single monthly subscription fee to access everything. In his view, this is a similar scenario to what happened with Spotify and the move toward music streaming, an outcome he believes hasn’t been great for musicians or record labels. And he fears a similar future is coming to the games industry.

Yesterday, Fries appeared on the Xbox Expansion podcast in an extended interview touching on multiple topics including Halo, the exec’s involvement in the Xbox launch at Microsoft, the struggles the console faced in Japan, and the current Xbox boss, Phil Spencer. Toward the end of the interview, the host asked Fries if there were any changes or tweaks he would make to Xbox’s current strategy. While he didn’t offer specifics, he did call out Game Pass as the one thing the company was doing that made him “nervous.”

“Game Pass scares me,” explained Fries. “Because there’s a somewhat analogous thing called Spotify that was created for the music business. And uh…when Spotify took off it destroyed the music business. I mean, it literally cut the annual revenue of the music business in half and it’s made it so people just don’t buy songs anymore.”

“So we have to be careful we don’t create the same system in the game business. I mean, these markets are more fragile than people realise,” continued Fries. “I saw the games industry destroy itself in the early ‘80s. I saw the educational software business destroy itself in the mid-’90s. So Game Pass makes me nervous. As a customer, I love it. I love Spotify as a customer: I have all the songs I’d ever want…it’s a great deal as a customer. But it isn’t necessarily great for the industry.”

Kotaku has reached out to Microsoft for comment.

Fries further claimed that the rise of music streaming services like Spotify had convinced Apple to stop selling songs because, in his words, “no one’s buying them anymore.”

However, as reported by VGC, some of the former Xbox exec’s claims are disputed by folks in the music industry. One stat used to counter Fries’ claim that the industry was cut in half following the rise of streaming was that when Spotify launched in 2011, the global record industry brought in about $US15 ($21) billion in revenue. In 2021, a decade after Spotify helped popularise streaming music, the industry reported $US25.9 ($36) billion in revenue.

That said, while the industry as a whole has continued to grow, individual artists and smaller bands have reported making very little via streaming services as most of the popular ones pay only a fraction of a penny per stream.

It should also be noted that while Apple has made changes to iTunes and its digital stores, you can still buy songs and albums.

Still, while some of Fries’ claims are debatable, what isn’t is that Game Pass has indeed changed the industry. With over 25 million subscribers, Game Pass has become a major focus for Xbox and its boss Phil Spencer, with the company continuing to bring big games and popular indie titles to the service every month. Fans have widely embraced Game Pass, as it lets folks with less money play more games than ever before. Sony even seems to be changing its long-running PlayStation Plus service to be more like Game Pass, adding more tiers that offer larger libraries of new and old games, much like Microsoft’s offerings.

While Game Pass has certainly changed how people buy and play games, it isn’t all good news, especially for smaller devs.

Indie studio The Game Bakers recently talked to Waypoint about the studio’s decision to not release a new update for Furi on Xbox because it didn’t sell well on the platform. According to the devs, on Xbox it’s become more and more important for smaller games to launch via Game Pass or risk being left behind. And even when you do release your indie game on Game Pass, as the studio did with 2021’s Haven, it’s not a guarantee that it will lead to increased sales or profits.

A similar situation occurred with Square Enix’s AAA looter shooter, Outriders, which has yet to turn a profit a year after launching on Microsoft’s subscription service.

Read More: After Years Of Hype, The Xbox Game Pass Burnout Is Here

It seems reasonable to imagine that as Xbox Game Pass continues to grow and add more games at a faster rate, it could become even harder to stand out from the crowd and find success on the service. And if Sony’s PS Plus revamp helps bring in more subscribers, it’s very possible that both of these major companies as well as newcomers wanting a slice of that pie will continue to expand the reach of game subscription services, something Fries is concerned about, too.

For now, Game Pass is still fairly small compared to Spotify, and most games are still released across multiple platforms and not exclusively as part of some subscription service, a fact Fries acknowledged during the podcast.

“The percentage of all games that are on Game Pass is still tiny, and there’s a lot of games,” admitted Fries, “200 games a week come out on Steam, and more than that come out on mobile, on iOS, and Android.”

“So, you know, it’s a thing I’m worried about for the future. But it is a thing I’m worried about.”