Microsoft’s Gaming Strategy Is Finally on the Road to Fruition

Game Pass plants the seeds for something truly revolutionary on the horizon.

A decade or two ago, if someone were to tell you that a multi-billion dollar video game production effort was to deliver its greatest spoils for the low price of ten bucks a month, you’d probably dub it as one of the worst business predictions of all-time–yet with their E3 showing yesterday, Microsoft alongside its newly-acquired roster of Bethesda studios finally delivered the fruits of their long-term vision. It’s one where Game Pass—their flagship game subscription service—will eventually kill the console generation refresh cycle and all the business legacy that’s been tethered to them since the dawn of gaming as a mass consumption medium.

The precedent for this transition was seeded long ago with the introduction of the PlayStation 3 and Xbox 360–a generation of consoles that off-loaded much of what the gaming business used to be online, and prospering alongside it was the mobile gaming industry which for a little while was prophesied to overtake it, only to end up as a complementary platform rather than a full replacement. With the mobile gaming takeover delayed, publishers sought to bolster their winnings elsewhere, and with it came the prominence of a concept that would come to be known as “games as a service”–you offer crucial content for free to all, then splice off vanity items such as cosmetics on a Season/Battle Pass track that players can spend a reasonable amount on every few months, a proposition that made recurrent revenue models in gaming a much easier pill to swallow for consumers whose initial hostility towards the idea was very hard-to-miss.

Game Pass is an evolution of the aforementioned idea, but upstream of delivery–to dub it as the Netflix of gaming isn’t incorrect, but it fundamentally doesn’t properly convey why the service is such a good deal to begin with. The entertainment industry was shaken to its core by the advent of streaming first with Spotify and later with Netflix, and those two companies essentially redefined the value of the medium by making the acquisition of music, movies and TV anywhere else almost seem like daylight robbery–barely anyone can justify the price of a rental on iTunes-adjacent services anymore, and it’s looking more like games might be heading in a similar direction.

We’ve known for a while that the current state of the industry is all but tenable–crunch is tearing through the industry like fire through wheat, and publishers are tasked with striking an ever-complex balance of expenditure versus reward as development becomes more costly and less appealing on the upper-end. PlayStation is reckoning with the first signs of such a shift in mentality, with Sony reportedly reducing themselves to a Marvel-like presence in the games industry in aims of future sustainability–Microsoft is betting on the multi-pronged nature of its business as a means to make Game Pass a ubiquity, at which point its gaming division won’t be under any obligation to meet lofty commercial numbers when the services proves a convenient entry-point for any title, regardless of its size or scope.

It’d be very easy to understate how massive a shift of mentality this is for a console manufacturer who’s now transitioning into an all-father role for all gaming conveniences–with them going this route, it wouldn’t even be much of a surprise if PlayStation get to partake in the journey of the Xbox’s revitalization. For now though, the company seems focused on regaining back ground lost during the last console generation—largely precipitated by a botched Xbox One roll-out and a misguided focus on broadcast entertainment–and if their announcements yesterday are any indication, even if they do not move more Xbox Series X/S units, they’re at least on track to finally make amends for a nigh-traumatizing and tumultuous past eight years.

Away from business considerations, yesterday’s presentation while not exactly lofty in gameplay terms—and Lord knows I’ve grown tired of cinematic “in-engine” trailers at this point—it showed that Xbox finally has an actual value proposition they can sell their customers on. Halo Infinite redeemed itself from last year’s subpar showing, Starfield looks like a good IP for Bethesda to lead in the footsteps of Fallout and the Elder Scrolls’ massive cultural influence, Forza Horizon 5 showcases yet still why Turn 10 and Playground Games have an uncontested lead in the racing genre, and there was a healthy smattering of smaller games to showcase Microsoft’s dedication to all game genres as worthy pursuit, which stands in sharp contrast against PlayStation’s more industrial—and tangentially cynical—outlook on the medium.

As someone who’s been playing video games for the better part of almost two decades now, I’m excited–but that feeling is only further amplified because I don’t have to spend the equivalent of a console purchase each year just to enjoy these titles. The old practice of milking every last drop of content out of the few games one got to buy is firmly a thing of the past now–Game Pass spells doom for gaming’s reputation as an expensive hobby, and this on top of being a really good value proposition for consumers, it makes the medium truly accessible as it’s often purported to be when it wasn’t always the case.

Even if much the above analysis takes Microsoft’s console manufacturer acumen as fully secondary, it doesn’t mean that this won’t result in the company investing more into its console business–in the same way that Xbox was always considered a glorified pre-built PC better fit for multi-platform releases than exclusives, this might put consoles in an even better position considering the current abysmal state of PC component prices. If the Series X/S cost a fraction of a high-end NVIDIA RTX GPU and are able to deliver 90% of the mid-to-high end PC experience, then that’s only a win for Microsoft–if Game Pass is truly to be the centerpiece of Microsoft’s future gaming strategy, then consoles are positioning themselves as the perfect companion piece for an already-large install base of PC users, the bulk of whom already favor Windows as their OS of choice over Mac or Linux.

This is the first time it has felt like Microsoft’s puzzle pieces are starting to fall into place–the games are making their way to the relevant hardware very soon, and if the company’s strategy continues its current explosive pace, it might even be a worthy player in the entire entertainment industry, not just gaming. Framed that way, Microsoft isn’t just making software–it treats gaming as its entry into the entertainment market, and if it all goes according to plan, domination of the space isn’t too far afield.