Xbox To Put Newest Microsoft Titles in Monthly Video-Game Service
(Bloomberg) -- Microsoft Corp. will start adding new video games, including upcoming “Halo” and “Gears of War,” to a monthly subscription service it introduced last year in an effort to lure gamers from Sony Corp. and Nintendo Co.
Starting with the March 20 release of “Sea of Thieves,” Xbox Game Pass customers will get new titles the same day they hit stores for their $10 monthly fee. Previously, subscribers would have had to pay separately to purchase the games in stores or by download, or wait for the games to be released for a while before they became part of Game Pass.
Microsoft’s Xbox One has lagged behind Sony Corp.’s PlayStation 4 in sales, while Nintendo’s Switch console, which can be used at home and on the go, has been selling out of stores since its debut last March. Microsoft has viewed the success of television services Netflix Inc. and Hulu as a sign consumers are increasingly interested in monthly fees for entertainment content rather than one-off purchases, Xbox chief Phil Spencer said in an interview. The lack of new games in Game Pass was a frequent issue raised by customers, he said.
“We want to be bold. We want to listen to our customers,” he said. “We've seen Netflix, Hulu, Spotify and others show that subscriptions for media are things customers have become more accustomed to.”
Elsewhere at Microsoft, the company has been trying to migrate Office software users to monthly subscription plans as well, which has the effect of making revenue more predictable and continuous as customers renew plans or set them to re-up automatically. Spencer declined to discuss the financial impact of switching from pricier, one-time purchases of Xbox games to a smaller monthly fee, except to say he’s “comfortable with the economics.”
Microsoft will also start selling six-month subscriptions to Game Pass in retail stores, where they currently only stock one month passes. Electronic Arts Inc. also has a subscription service for its games.
©2018 Bloomberg L.P.