Former PlayStation CEO Says Xbox Game Pass Is Unsustainable

Words: Michael Beckwith

There's no denying that subscription and streaming services are on the rise. Xbox Game Pass is so popular that some PlayStation owners are baffled that Sony has yet to simply copy what Microsoft is doing.

In the past, PlayStation boss Jim Ryan, the CEO of Sony Interactive Entertainment, shut down the possibility of a PlayStation Game Pass, beyond the current PlayStation Now model, calling it an "unsustainable" business model. And now a former Sony executive has echoed the sentiment.

Game Pass is pretty much an essential for the Xbox Series X, a console we like a whole lot...

Speaking with GamesIndustry.biz, Shawn Layden, who served in several senior roles during his time at PlayStation until 2019, most notably as chairman and CEO of SIE Worldwide Studios, expressed scepticism for subscription and streaming services. According to him, nobody has figured out a good working business model for them, and he believes that neither will encourage more people to purchase home consoles.

"People don't buy consoles because they want more steel and plastic in the living room," he says. "People buy consoles because they want access to the content. If you can find a way to get the 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 yet for that."

"It's very hard to launch a $120m game on a subscription service charging $9.99 a month," he continues. "You pencil it out, you're going to have to have 500 million subscribers before you start to recoup your investment. That's why right now you need to take a loss-leading position to try to grow that base. But still, if you have only 250 million consoles out there, you're not going to get to half a billion subscribers. So how do you circle that square? Nobody has figured that out yet."

Sony, GameDaily.biz

Despite what Layden says, Game Pass remains incredibly profitable for Microsoft, and it's easy to understand why. For a regular subscription fee, Xbox owners can access a massive library of titles, allowing them to experience games they otherwise may never have touched.

Some games are even being added to it on the same day as they launch. Outriders was a day one Game Pass title, and publisher Square Enix believes this decision bolstered player numbers and actually improved digital sales (thanks VGC).

Layden is probably correct in that streaming services won't do much to boost console sales, but one of Microsoft's goals with streaming is to bypass needing a console at all. Game Pass is already available on mobile phones and Microsoft is even planning to embed the service into smart TVs.

Microsoft and Sony obviously have very different business strategies right now, but even PlayStation fans must admit that Microsoft's ideas are only benefitting its customers, with Game Pass arguably the best-value subscription service currently available in gaming.

Topics: Xbox, News, Xbox Series X, Xbox Game Pass, PlayStation