Shawn Layden was at one time the head of Sony Interactive Entertainment America, president of SCE Japan and chairman of world studios before he left the company in 2019, and as he is set to re-join the industry with Streamline Media Group, he has some skepticism around what many call “the best deal in gaming”, Xbox’s Game Pass.
“People don’t buy consoles because they want more steel and plastic in the living room,” says Layden in an interview with website GamesIndustry.Biz. “People buy consoles because they want access to content. If you can find a way to get content into people’s homes without a box, then yes, indeed. Everyone has a streaming solution of some form. Most of it is limited by whether you have a decent internet connection. And they haven’t constructed the business model that works for that yet.”
The issue Layden sees is that he just doesn’t think it will be sustainable in the long-term. “It’s very hard to launch a $120m game on a subscription service charging $9.99 a month. You pencil it out, you’re going to have to have 500 million subscribers before you start to recoup your investment…If you only have 250 million consoles out there, you’re not going to get a half billion subscribers. So how do you circle that square? Nobody has figured that out yet.”
While Layden isn’t exactly incorrect about the sustainability of a service like Game Pass, Microsoft happens to be in a unique position where they can reasonably afford for Game Pass to be a loss-leader for some time, and clearly boss Phil Spencer see’s something in the service and its value that Layden and many other players who are still baffled at how Game Pass works for Microsoft don’t.
Source – [GamesIndustry.Biz]