Microsoft Gaming: Xbox Cloud & Game Pass

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Could you start by briefly describing your experience?

Another significant consideration for consumers is the cost. When purchasing a console for the first time, it's likely to be priced around $500. The consumer might consider the free game, valued at around $60 to $70, as a bonus. However, they'll probably also need to purchase an internet service package, such as PlayStation Plus or Xbox Live, which is an additional cost. They might also need a second controller if there are two children in the household. After taxes and other expenses, the total cost could be around $700. At this point, the consumer might consider the resale value of the hardware. If they don't like the Xbox, they could sell it.

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Could you start by briefly describing your experience?

Selling a physical item on eBay allows me to extract value from it. However, when I provide you with a Game Pass, it's akin to a Netflix subscription. You don't own the movies, and you can't resell them later. It's important to make consumers comfortable with the idea that they don't technically own the game, but rather, they own access to the game. This is a very different value proposition. Most gamers are traditionally used to having a physical disc in hand. For the past 30 years, gamers have been able to trade in a game for credit towards a new one once they're finished with it, thus retaining some residual value. However, with a subscription service, there's no residual value. Making consumers comfortable with this value proposition is a unique challenge.

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It's interesting that you mention this. This has also been a topic of conversation around Stadia when they discontinued. They did refund the base game money, but everything spent in-game, like extravagant skins for your NBA 2K MyPlayer, is lost.

Stadia is a good example of a situation that, as a gamer, I saw coming when they announced it. Industry insiders, like myself, could have told you that Stadia was never going to succeed, not because they had a bad product, quite the opposite. The value proposition was good. The problem was in the fundamentals of Stadia. Streaming a 4K video game requires a tremendous amount of bandwidth. I'll explain it in a way that Industrial Light and Magic (ILM) once explained it to me. Have you ever seen Pirates of the Caribbean?

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