Speaking to GQ for its profile celebrating 20 years of Xbox, Sarah Bond, Microsoft’s head of gaming ecosystems revealed that the Game Pass project, originally codenamed “Arches”, began as a rental service for video games.
The shift towards a Netflix-like subscription model came as a result of changes in the sales lifespan of games, she explained.
“Something like 75 percent of a game’s revenue used to be made in the first two months of release… nowadays it’s spread over two years.”
Xbox Wireless Controller – 20th Anniversary Special Edition
The piece also reveals that the Xbox team was initially met with great resistance when going to publishers with the concept of Game Pass.
“They were like, ‘no way, [Game Pass] is going to devalue games,” Bond said. The team then began experimenting with older titles in order to convince publishers.
Xbox Game Pass launched in June 2017 and has become central to Microsoft’s gaming business, attracting over 18 million subscribers as of January 2021, according to the latest publicly announced figure.
The service offers members access to over 100 titles, including all first-party games at launch, for $10 / £8 per month on console or PC. For $15 / £11, users can access the games on console, PC and mobile devices, including via Xbox Cloud Gaming.
During Microsoft’s fourth quarter earnings call in July, CEO Satya Nadella claimed Xbox Games Pass was “growing rapidly”, with subscribers playing approximately 40% more games and spending 50% more than non-members.
Elsewhere in the GQ interview, it’s claimed that Microsoft is encouraging head of Xbox, Phil Spencer to think about a succession plan. Spencer has been a Microsoft employee for over three decades, and the company’s executive vice president of gaming since 2017.