Microsoft’s newly announced game pass will act as a digital subscription service for its games, which will allow users to download over 100 games onto their Xbox (not all at once) for 10 dollars per month, and play them until the game is taken off the list. However, this program will disrupt the retail industry, empty wallets, and lower sales of stores such as GameStop.
The game pass is appealing to many consumers because the asking price is cheap. Games will come and go from the service, and any game taken off the list will be 20 percent off. The problem with this is that the game will be marked off on the Xbox digital store, an incentive for gamers to give their money to Microsoft rather than retail stores.
The monthly price may seem low for about 100 games, but over time, the price begins to add up. By the end of the year, 120 dollars went into the pass, and there is nothing to show for it since games are deleted unless bought. Also, any game that has an online multiplayer feature requires Xbox Live, a different subscription service for another 10 dollars that allows for online play, for a total for 20 dollars per month.
GameStop cannot compete with this service and investors know it. After the announcement of the pass, GameStop’s stock dropped two dollars, or about seven percent of its original price.
Junior Sarah Rasmussen says, “This new program is too convenient. Consumers no longer need to leave their houses to play new games, which would also affect stores that aren’t strictly video game based. Now, retailers such as Target and Best Buy lose a large chunk of profits designated for their selection of games.”
To play games off of the pass, each title must be downloaded onto the system. Trouble arises with this method this late into the console’s lifespan. By now, most Xbox owners have at least 15 or more games, either physically or digitally. Video games take up a lot of storage, and gamers may not have enough space to download games off of the pass.
For example, the newly released Gears of War 4 takes up 54.6 GB.
If gamers attempt to keep enough storage on their console, then they will not be able to continue buying new games without cashing out for an expensive hard drive. The recommended hard drive is two terabytes, or 2000 gigabytes, which could cost up to 100 dollars.
Xbox 360 games will also be included in the catalog of games to play, which is the biggest problem for GameStop. The company makes the most revenue off of the used game market because when a new game is sold at GameStop, the money goes to the developer of the game. However, when a game is traded in, GameStop can resell that game for their own profit.
One of GameStop’s biggest selections is their Xbox 360 titles. With the game pass, most of those games on the shelf will go unsold and the store will lose money.
This direct conflict can be related to the closure of Blockbuster. When Netflix took the world by storm, DVDs became obsolete, and so did DVD rental stores. To see this event unfold again would be crushing to any fan of physical media.
Freshman Dan Doss says, “If two businesses are competing, one of the businesses has to have the same products with the same, or higher quality, but with lower prices than the other. Even though a business has been around longer, the lower price will make the competing business more successful.”
The games pass looks to be a cost effective alternative to purchases, but the program will send waves of change through the industry. All money spent on games will go to Microsoft via its digital store instead of retail industries. Anyone who still enjoys visiting a local game store and picking up games, new or old, may be out of luck this spring.
How will this service affect the way that you play and purchase games?
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