Former Sony Interactive Entertainment America CEO Shawn Layden has claimed that Xbox Game Pass will need 500 million sibscribers if it wants to be sustainable.
In an interview with gamesindustry.biz, Shawn Layden talked about the ever-growing cost of video game development and how the industry should change in order to tackle the problem and avoid consolidation. After talking about shortening the length of games and growing the player base, conversation turned to Microsoft and its efforts to make gaming more accessible with Xbox Game Pass.
According to Layden, services like Game Pass are unsustainable due to the cost of development, claiming that releasing blockbuster titles via subscription models would require a ridiculous amount of subscribers to get a return:
"It’s very hard to launch a $120M game on a subscription service charging $9.99 a month. You pencil it out, you’re going to have to have 500 million subscribers before you start to recoup your investment," explains Layden. "That’s why right now you need to take a loss-leading position to try to grow that base."
Layden also talks about the potential of streaming services such as Google Stadia, xCloud, and even PlayStation Now. Like with subscription models, Layden isn't convinced that the world itself is ready to support game streaming:
"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 pretty clear that Shawn Layden doesn't think subscription services like Game Pass are viable due to development costs, but Xbox would probably argue differently. Xbox head Phil Spencer has claimed in the past that Game Pass isn't a money sink and says the service is more than sustainable in today's market.
It looks like only time will prove who's right.
Source: VG24/7