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Comment by curiousllama | Hacker News Reader

Microsoft is just trying to recreate console lock-in without having to subsidize hardware so much.

(1) Microsoft is trying to expand their gaming division, but struggle with first-party games. This acquisition is an acknowledgement that MSFT needs Bethesda creatives.

(2) Microsoft's big strategy right now is to build their Xbox ecosystem - they're pushing GamePass, Xcloud, etc. heavily, and trying to become Netflix for games.

I'd guess they're basically buying Bethesda's key franchises to drive GamePass subs. They'll build them quick, lock you in with a $10/month sub, and let Bethesda slowly merge with the mothership.

Short term, I'm excited because I want these new games! Long term, I fully expect Bethesda to get hollowed out.

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I don’t see how $10/mo is at all profitable with them adding all these AAA games to it.

1 - They'll break the sub out into tiers.

2 - Netflix is around the same price - a big enough market smooths it out.

3 - The press release defines their market as 3B people. I wouldn't be surprised at all if their internal business cases target 1B+ people.

I'd be curious to know what kind of impact that $10/mo/user would have compared to the traditional game sales cycle from a revenue stream perspective.

Say that the system has a current-gen lifespan of 5 years and users run their subscription throughout the duration of the service, that's $600 per user assuming no price increases. I don't game nearly as much as I used to, so that would cost me way more than I've spent the last several years on games.

The shitty thing about a model like this is that I can't just power the system on after 6 months and just play without turning the subscription back on.

Netflix has something like 150,000,000 subscribers. $10-15/mo adds up quickly.

Think of how many people have Netflix that don't even use it. They want to get Game Pass to the point where it's a de facto standard that a gamer has Game Pass.

Maybe $10/mo towards games from studios they own is more profitable than $10/mo towards games from elsewhere?

Microsoft has hinted that it's a financial success already.

It's probably the gym membership model. Developers get money for actual time played. The market of users that just play from time to time and don't really care about the 10$s is probably substantial.

I fall into this category. I only really get an urge to play every few months. And unless there is some specific game I'm interested in, I just pick something from the Gamepass catalogue, which is already pretty substantial. (it has/had great games like RDR2, GTAV, Witcher 3, Subnautica, No Mans Sky, ...)

While cancelling the subscription and then re-subscribing when needed is actually pretty smooth (re-subscribing takes just 2 button presses), I don't care enough to do it.

And all the "idle" revenue probably allows Microsoft to play decent rates to publishers, so they actually incentivized enough to put their games on the service.

> re-subscribing takes just 2 button presses

It always does. What about cancelling?

If i remember correctly: about 5. button presses, and clicking a email confirmation link.

Nothing egregious. I did have to use Google to figure out where to go in the app, though...

I would assume there are more people who would pay $10 a month ($120/year) for access to all of these AAA games than there are people who buy >2 new AAA games a year (~$120/year). Thus, roughly speaking, it should be profitable. There is ~0 marginal cost for a customer playing a new game

What's your take on the potential long-term success of Game Pass?

Definitely a winning move. Netflix beat Blockbuster, TiVO, AND cable's on-demand video services with a worse content library and harder UI (initially - those boxes sucked) - because it was cheap, easy, and felt free. GamePass recreates that, at least for casual gamers.

Plus, GamePass locks you in like consoles once did. That stickiness in recurring revenue is hugely valuable in itself, and because it has a network effect (this was basically the reason for the ongoing console wars).

Combine that with cloud gaming, and the lock-in and UX just gets better.

Their main barrier is good content. Thus the splashy buy.

I've been using Game Pass for roughly 18 months. Really like it so far, though I've gotten it for "free" through MS Rewards. I'd probably have a different opinion if I actually paid for it monthly.

The thing that is missing are the huge AAA games, but I honestly can't see most of those coming to Game Pass. They may come but like 1-2 years after initial release.

Minus like the Forza and Halo series, most of the MS owned studios developing games are fairly shorter in length. Don't take that the wrong way though, even though they are shorter some are real gems. Just don't expect to play every game on there for 20+ hours or anything.

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