An Endless Stream of Games Is the Perfect Business Model for a Pandemic

On Aug. 11, Microsoft Corp. posted an alert on the Twitter account of its Halo franchise: The game’s next installment wouldn’t be ready this fall as originally planned, with its release delayed until 2021. A few years ago, that would have been devastating news for the team that makes the company’s Xbox game console, which had been planning to roll out a new model in tandem with Halo Infinite. But the Xbox will arrive as scheduled in November, and Microsoft is bullish about its prospects—even though Sony Corp.’s rival PlayStation 5 will also make its debut in the coming months, with what many players say is a stronger slate of games. Central to Microsoft’s optimism is a service called Game Pass, which offers a vast selection of titles for a flat monthly fee. “We’re confident,” says Sarah Bond, the vice president who oversees relations with game creators. “We will launch with thousands of games.”

Game Pass and similar offerings from Apple, Google, Sony, and other software houses are changing the dynamics of the video game business. After spending hundreds of dollars on a game machine, users would typically have to lay out an additional $60 or so for any newly released A-list title they wanted to play. Now a subscription costing $5 to $15 per month will get them scores, or even hundreds, of games—including, in Microsoft’s case, hot titles on the day they’re released. Since Game Pass was introduced three years ago, Microsoft has signed up 10 million subscribers. Sony, which started its PlayStation Now service in 2014, has some 2.2 million customers, more than triple the number a year earlier after the price was cut in half, to $10 per month. “Subscriptions will play a big role in driving engagement,” says George Jijiashvili, an analyst at researcher Omdia.