The fate of small games is to disappear from Game Pass because they don’t help recover the money spent by Xbox: this is what an ex-Microsoft man believes.
Brad Hildermanex-PR Manager at Microsoft, commented on the recent one via his LinkedIn account closure of the four Bethesda teams by Xbox.
In his opinion he doesn’t have a choice nothing to do with Bethesda directly, but more than anything it is linked to Game Pass and Activision. According to the ex-manager, Microsoft now wants Xbox to generate profits and recover the money invested in acquisitions and therefore smaller games and teams become secondary, because they do not remain flagship titles on Game Pass long enough.
Hilderman’s full commentary on the closure of Xbox teams
“There are two reasons why all Bethesda studios closed and neither of them have anything to do with Bethesda (directly): Game Pass and Activision.”
“Most great paradox of Game Pass is that virtually every game that releases on the service fails to meet sales goals. But it makes sense: why pay full price to buy a game when you can play for “free” with a subscription? This phenomenon is partially offset by attributing portions of revenue to the best-performing Game Pass games each month, but there are factors that work against the games. Specifically, the fact that most games don’t stay at the top of the charts for more than a month or two and that Game Pass growth is stagnant. So games like Hi-Fi Rush, which is amazing, get a very small boost in revenue from being the hottest Game Pass game for a month, then plummet when everyone moves on to the next game. Poor Redfall fared even worse, as it was released so sloppily that it never had a chance.”
“This system has been good for a while, when Game Pass was growing dramatically, but now it has slowed down and the amount of revenue it attributes to games doesn’t keep pace with the budgets allocated to making them.”
“But none of this would have mattered even 3 or 4 years ago, because at the time Xbox was basically a rounding error on Microsoft’s books. The division made a little money, but more importantly it didn’t cost much and the other parts of the company easily covered the gap. Then Xbox went on a buying spree and spent a lot of money on Bethesda, but even more on Activision. Now, the eye of Sauron has transformed, and Xbox should start recouping that $70 billion, or at least cutting its expenses to the bone (and more) while it tries.”
“This brings us back to Game Pass. So far, big bets on driving new subscriptions (Redfall, Starfield) haven’t spurred enough growth, and there’s not much on the horizon to jump-start the momentum. The best bet is COD, but is it really possible to risk the guaranteed sales revenue the franchise brings with it by putting it on Game Pass at launch and potentially missing out on massive sales? I don’t know what the plans are, but either you put it on Game Pass and lose money, or you don’t and subscribers rebel because they think that’s what they signed up for.”
“COD will be fine, as will other mega-studios with huge IPs, but the impact is being seen: all the smaller studios that make really interesting games are doomed to disappearsimply because, no matter how good games like Hi-Fi Rush are, they will never make enough money to fill that $70 billion hole that Xbox now needs to dig itself out of.”
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