Despite questions over its profitability, Microsoft has repeatedly assured journalists and consumers that the business model is sound and not supported by the obscene wealth of its parent company. That’s despite switching to a financial reporting strategy that obscured the true nature of its numbers and focused on revenue rather than hard profits.
PlayStation has said on the occasions it has been asked that the strategy is simply not “sustainable” – a streak that would repeat itself multiple times. “We’re not going to go down the path of putting new titles into a subscription model,” Games boss Jim Ryan told Industry.biz. “These games cost many millions of dollars to develop, well over $100 million. We just don’t see it as sustainable.”
He was, of course, accused of being a self-serving liar – and this became another arrow in the quiver of Ryan’s biggest critics, many of whom believed he was unfit to head PlayStation despite his unprecedented commercial success.
Sony continued to reinvent its subscription offerings, combining PS Plus with PS Now to create a more impressive trio of levels that included a wider selection of PS5 and PS4 games. And it later experimented with adding smaller day one titles to its lineup, such as Tchia, Humanity, and more recently Animal Well. While there are still question marks over the more expensive ones PS Plus Premiumvalue PS Plus Extra got a big round of applause.
While the experiment proved successful for PlayStation’s bottom line and allowed Sony to earn more revenue on average from each individual subscriber, the total number of PS Plus members remained largely static at just under 50 million. Despite this, specifically in the United States, consumer spending on game subscriptions has hit a brick wall, with year-over-year growth as low as one percent during some months of the year.
All of this culminated in some seismic changes to Microsoft’s business model overnight: including the introduction of a Game Pass tier that no longer includes first-party releases. A new subscription called Game Pass Standard will be valid from September remove the promise of day one games – despite still paying a hefty $14.99 per month fee.
The Redmond firm isn’t completely scrapping the concept, but those looking to play titles like Fable and Call of Duty: Black Ops 6 at launch will now have to fork out $19.99 a month. PC Game Pass will keep the promise of day one games, though its price is also increasing from $9.99 to $11.99.