what you need to know
- An alleged survey published on ResetEra suggests Microsoft may be investigating an ad-supported tier of Xbox Game Pass that also grants Xbox Live Gold.
- The cheaper tier would include Xbox’s entire exclusive games library, including key first-party titles six months after launch. However, these games would run ads at launch to help fund the stage.
- Microsoft also recently patented personalized advertising for display in games, which seems suspiciously timely given this survey.
- It can also be nothing.
A recent confluence of events has led some (including me) to speculate that Microsoft may be exploring a cheaper, ad-supported tier of Xbox Game Pass.
A post buried in a ResetEra thread appears to show a recent poll sent to some Xbox users asking how they would feel about an additional tier of Xbox Game Pass.
If that’s really the case, the rumored tier would cost $3 per month and give access to a wide range of Xbox Game Pass content with some pretty generous restrictions. It would feature an EA Access-like vault of previous first-party Xbox games, with a similar 6-month delay on new Xbox games before they reach the service. Those who have accessed these download-only Xbox games through this tier will be prompted to view an ad before the game begins.
Assuming the above table is genuine, this tier also includes online multiplayer access, which currently costs $9.99 per month and offers no games other than the heavily restricted Xbox Live Games with Gold program. Games with Gold now typically features just two Xbox One indie titles a month and has been the subject of criticism and ridicule for some time.
This supposed ad-supported tier would aggressively undercut Xbox Live Gold monthly tier and potentially become a head scratcher in this equation. Would Microsoft really be willing to sacrifice the $10-a-month Xbox Live Gold subscription for this far cheaper version? in addition loads of the best Xbox games? Can advertising revenue make up for the potential shortfall here? I for one am skeptical. Microsoft also offers Xbox Live Gold for $60 a year, which equates to $5 a month, but even at that price, there’s still a deficit to consider when considering millions of users.
Whether or not the economics work in this scenario is up for debate, but it certainly seems like Microsoft is exploring an ad-supported tier of Xbox Game Pass in a specific format. A recent patent filed by the company includes technology that predicts when in-game interactivity will decrease, possibly due to a loading screen, for example. Then Xbox would serve an ad based on the user’s privacy settings and interests. Online ads have been a growing segment of Microsoft’s Bing business for quite some time, and with other subscription services like Netflix exploring ad-supported tiers, it makes sense to see Microsoft following the same path.
Could it really happen?
As we often say at Windows Central, Patents are not products. Microsoft files mountains of patents based on its research every week, and it’s often claimed that research doesn’t really bear fruit. Likewise, surveys don’t always lead to products. It could be that users will overwhelmingly vote against the idea of an ad-supported Xbox Game Pass tier and nix the idea in pregnancy.
Either way, I suspect Microsoft is looking at ways to further lower the barriers to entry for its subscription services. Xbox Live Gold feels like a relic of the past that has been almost completely neglected in marketing in favor of Xbox Game Pass. However, it’s an undeniably important component of the consoles business model. You sell the hardware at cost (or even less) and benefit from software and services afterwards. If Microsoft were to scrap the Xbox Live Gold monthly fee without a suitable replacement, it could result in a huge cash flow deficit, which doesn’t exactly seem like a smart move in the current economic climate.
On the other hand, scrapping Xbox Live Gold or merging it into Xbox Game Pass tiers would give Microsoft a strong differentiation over the competition given how much Xbox Game Pass offers in general. I suspect Xbox Live Gold will eventually disappear, but only if it makes commercial sense for Microsoft.