Shane Bailey

What if Microsoft could deliver XBOX games on Amiibo-like Skylanders revival figurines? 🤔

Blades on web. Do we like this experiment?

You know my take on this. I always stood by my words on this topic. If they are bold and they want the Xbox ecosystem to thrive, they need exclusive games. Lots of them. Just like their competition has. Build a strong library you can only get with Xbox; and players will come.

Gears of War: E-Day has sold 230K copies (@alineaanalytics estimates). Steam accounts for 168K of those, with Xbox (console and PC) selling 62K. But there’s more to this story, as Xbox makes up the bulk of revenue (almost three-quarters). On Xbox, Game Pass is cannibalising much of the premium revenue. Our estimates show that 1.7M folks accessed E-Day via their subscription rather than a copy. But Xbox is having it both ways – or having it halfway, at least – via its Premium Edition Game Pass upgrade. Game Pass subscribers could pay $30 (or their local equivalent) for up to five days of early access starting October 1. Our estimates show that of the 1.7M who accessed E-Day through Game Pass, 722K paid for the upgrade. Between the review embargo lifting on October 1 and the full release, E-Day managed to shift another 250K early-access upgrades – no doubt helped by the campaign’s rave reviews. So despite selling far fewer copies on Steam, Xbox accounts for almost three-quarters of the revenue (roughly $26M of the $37M, versus about $11M on Steam). So “230K copies” undersells the paying audience. Including the 722K upgrades, nearly 950K people actually paid something for E-Day. While E-Day is a sublime game (it's made my top 10), these are soft numbers for a flagship when Xbox badly needs revenue wins. E-Day sold 62K copies on Xbox against 722K Premium upgrades, so for every one copy sold on Xbox, nearly 12 Game Pass upgrades were sold. The $70 premium SKU is – functionally – dead on Xbox. In a world without day-one Game Pass, many of these folks would have bought E-Day at $70. They paid $30 for five days early access to something they don’t own. Xbox is, in effect, charging its most valuable customers the least, based on a hangover from a tried-and-exhausted strategy from a previous administration. Those 722K willing-to-pay players generated about $21.7M via the upgrade. If three quarters of this group – mostly US and European audiences – bought E-Day outright, that’s nearly $40M. Of course, Game Pass does bring in meaningful recurring revenue, and E-Day is adding value for hundreds of thousands of subscribers. However, Game Pass is no longer growing, so Xbox is at a crossroads. Normally you can’t see what a Game Pass player would have paid, because the game’s just there in the subscription. But the $30 early-access upgrade estimate shows that 722K people demonstrated they’ll spend real money on this game. Xbox is reportedly looking to do a Netflix and bolt on an ad-supported tier to pad it further. But that will just set a new floor, and leadership keeps telling us the priority now is revenue growth, which is subscriber-speak for ARPU. Xbox has already pulled Call of Duty from day-one Game Pass after day-one inclusion hammered its sales, with new CoD titles now arriving on the service around a year late. We know that some Microsoft executives believe the service devalues games outright, and rumours (which Microsoft has dismissed so far, to be fair) suggest that day-one releases could be taken off Game Pass. When a game this bloody awesome and well-reviewed does this softly on its home platform, the model – not the game – gets brought into question. Which leaves Xbox at a crossroads. Will it keep making Gears games when the financial returns are this thin and the margins this low? And if it does, does the next one arrive off Game Pass at day one – the way CoD now does, or on PlayStation? More, including player crossover and playtime distribution, on the new Substack.

Xbox Project Helix | Blades Concept with Gears of War: E-Day by Klobrille

Gears of War: E-Day | Reviews 10 - DayOne 9.5 - TechRaptor 9.5 - ButWhyTho 9.5 - MondoXbox 9 - IGN 9 - CGM 9 - Voxel 9 - Nexus Hub 9 - Screen Rant 9 - Console Creatures 8.5 - XGN 8.5 - Areajugones 8 - VGC 8 - Slant 8 - GAMINGbible 8 - SteamDeckHQ 6 - Guardian MC: 89 OC: 87