What you need to know
- A purported survey posted on ResetEra suggests that Microsoft may be exploring an ad-supported tier of Xbox Game Pass, which also grants Xbox Live Gold.
- The cheaper tier would include all of Xbox’s exclusive library of games, including major first-party titles six months after launch. Those games, however, would play ads upon launch to help fund the tier.
- Microsoft also recently patented personalized ads to show in games, which seems suspiciously timely given this survey.
- It may also be nothing.
A recent confluence of events has led some (including me) to speculate that Microsoft could be exploring a cheaper tier of Xbox Game Pass, supported by ads.
A post buried in a ResetEra thread appears to show a recent survey that was sent out to some Xbox users, asking how they’d feel about an additional tier of Xbox Game Pass.
If real, the purported tier would cost $3 dollars per month, and provide access to a variety of Xbox Game Pass content with some fairly generous limitations. It would include an EA Access-like vault of past first-party Xbox games, with a similar 6-month delay on new Xbox games from hitting the service. Those who accessed these download-only Xbox games via this tier would be asked to view an ad before the game starts rolling.
Assuming the above table is real, this tier also includes online multiplayer access, which is currently $9.99 per month and offers no games beyond the severely-diminished Xbox Live Games with Gold program. Games with Gold now generally only includes two Xbox One indie titles per month, and has been the subject of criticism and derision for some time.
This supposed ad-supported tier would aggressively undercut the monthly tier of Xbox Live Gold, potentially becoming a head-scratcher in this equation. Would Microsoft really be willing to sacrifice the $10 per month Xbox Live Gold subscription for this far cheaper version which also includes vast amounts of the best Xbox games? Would ad revenues be able to make up for the potential shortfall here? I, for one, am skeptical. Microsoft does offer Xbox Live Gold at $60 per year as well, working out to $5 per month, but even at this price, there’s still a deficit to account for when accounting for millions of users.
Whether or not the economics works in this scenario is up for debate, but it certainly seems as though Microsoft is exploring an ad-supported tier of Xbox Game Pass in some format. A recent patent filed by the company covers technology that predicts when in-game interactivity has decreased, perhaps due to a loading screen for example. Then, Xbox would serve up 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 explore the same route.
Could it really happen?
As we often say at Windows Central, patents don’t mean products. Microsoft files mountains of patents every week based on research it does and oftentimes said research doesn’t actually bear fruit. Similarly, surveys don’t always result in products either. It could be that users vote overwhelmingly against the idea of an ad-supported Xbox Game Pass tier, killing the idea in gestation.
Either way, I suspect Microsoft is exploring ways to further reduce the barriers to entry for its subscription services. Xbox Live Gold feels like a relic of the past, almost completely side-lined in marketing in favor of Xbox Game Pass. However, it’s an undeniably important component of the console business model. You sell the hardware at (or even below) cost, and profit on software and services after the fact. For Microsoft to scrap the monthly Xbox Live Gold fee without a suitable replacement could create a vast deficit in its cash flow, which doesn’t exactly seem like a smart move in the current economic climate.
On the flip side, scrapping Xbox Live Gold or folding it into Xbox Game Pass tiers would give Microsoft some strong differentiation against competitors, given how much Xbox Game Pass offers in general. I suspect we will see Xbox Live Gold disappear eventually, but only when it makes economical sense for Microsoft.