Highlights
- Microsoft is considering providing free game streaming through Xbox Game Pass in select regions in exchange for ad views, allowing them to reach untapped markets.
- Xbox chief financial officer Tim Stuart highlighted the potential of offering xCloud in regions like Africa, India, and Southeast Asia to reach millions of gamers with limited disposable income.
- Microsoft invests over $1 billion annually in Xbox Game Pass to support third-party game studios and attract new subscribers.
Microsoft is considering the idea of offering people in select regions free game streaming over its Xbox Game Pass service in exchange for ad views. Such a strategy could help the American tech giant tap into markets that would have otherwise been unreachable.
Xbox Game Pass is Microsoft's subscription-based game distribution service, offering users the ability to download and play from a massive catalog of titles that range from AAA games to small indies on supported platforms. The service has a $9.99 Standard/Core tier as well as a $16.99 Ultimate tier that also gives subscribers access to cloud-based game streaming via Microsoft's xCloud platform. This game streaming service, according to Xbox chief financial officer Tim Stuart, could help Microsoft expand in certain areas.
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In an interview that he gave at the Wells Fargo TMT Summit that was held on November 28, Stuart described a vision of offering xCloud in regions like Africa, India, and Southeast Asia in exchange for ad views. "[In these] places that aren't console-first, you can say, 'hey, do you want to watch 30 seconds of an ad and then get two hours of game streaming?'" Stuart explained, according to a transcript provided by Tweaktown. Many countries in the regions the executive mentioned have no official support for Xbox Game Pass Ultimate, therefore they also have no official support for Xbox's cloud gaming service.
Stuart went on to say that half of Africa's population are people who are younger than 24, have mobile devices, but have very limited high-end disposable income. "So we can go in with our own business models and say... there's millions and millions of gamers we would never have been able to address there, and now we can go in with our business models," he claimed. Xbox Game Pass reached 25 million subscribers in January 2022. Microsoft has not released new data since then, which implies that either subscription numbers have slowed down or that they dropped. Regardless of what happened behind the scenes, an influx of new users from previously untapped regions would be beneficial for Xbox.
Microsoft stopped announcing Xbox sales figures because the company believes numbers alone do not show how well the brand is performing against its competitors, Stuart also said at the Wells Fargo 2023 TMT Summit. Xbox head Phil Spencer has been parroting the sentiment for the longest time, insisting that the brand's success was determined by the number of people who used Xbox services and the amount of time they spent on the ecosystem.
Microsoft spends more than $1 billion on Xbox Game Pass every year, according to Spencer. The money is needed to support the large number of third-party game studios that are part of Xbox Game Pass. This daunting position allows Microsoft to continue offering a large number of games on Xbox Game Pass that hopefully attracts new subscribers.
Xbox Game Pass Ultimate
Xbox Game Pass Ultimate is the highest tier of Microsoft's flagship game subscription service that offers over 100 game titles that you can play with a single purchase, making it one of the most outstanding value propositions of the Xbox ecosystem to date.