When entering the gaming business, Microsoft had to pay millions of dollars to publishers and developers in order to get games to release day one on Xbox.
Speaking during the latest episode of Iron Lords Podcast, former corporate vice-president of Microsoft’s Interactive Entertainment Business division Peter Moore revealed that when the software giant entered the gaming market, it had to pay millions of dollars to publishers and developers to get games day one on Xbox. They were all in Sony’s “pockets”, he added.
Moore explained that Microsoft had to write really big checks to get content, because Xbox didn’t have an install base to point to at the time. The only thing the company had were forecasts, which were a tough sell to publishers. Therefore, Microsoft had to offer millions to support development teams to bring games day and date on Xbox along with other consoles, if not exclusively. The console maker had to travel the world and engage with and prove itself to publishers. According to Moore, back in 2001, the 3rd-party development community was very much in Sony’s pockets, with the Sega Dreamcast falling off and Nintendo being first-party focused as always. Therefore, it became necessary for Microsoft to offer some incentive to get games to launch on its platform alongside PlayStation.
Flash forward to 2023, and Microsoft is on the verge of permanently putting one of the biggest 3rd-party publishers in its pocket with its acquisition of Activision Blizzard King. Digital media and entertainment software analyst, Michael Pachter, expects Xbox Game Pass to hit 50 million subscribers by the end of 2024, after the Activision Blizzard King deal closes.
Pachter suggested that the current Xbox Game Pass install base amounts to 25 million subscribers, and that, by the end of 2024, the service will probably get 10 million additional users from Europe alone. According to him, post acquisition, Xbox Game Pass offers will offer tremendous value for money. He brought up the Call of Duty franchise as a major catalyst in the potential growth of Xbox Game Pass, further stating that PlayStation owners would want to play the first-person shooter series on Microsoft’s premium subscription service in addition to the other games available there.
