Sean LaydenThe former CEO of PlayStation and a central figure in the PS4 era is back to talk about the subscription model applied to video games, with a special focus on Xbox Game Pass. According to Leyden, the system Not financially viable for AAA gamesit must recoup increasingly higher production costs and aim to generate substantial profits.
In an interview on The Expansion Pass podcast, Layden explained that for make it truly profitable Services like Game Pass It will serve a huge user base: “I said somewhere that to make Game Pass profitable, you need about 500 million subscribers. That number was chosen for exaggeration. But apparently it’s not that wrong.”
The former manager clarified that the service can be profitable for the platform that manages the service, but not necessarily for the game developers: “Of course Microsoft is profitable. But that’s like saying the casino is profitable. The casino always wins.”
PlayStation chooses a different path
Redden said the main issue is the developer’s revenue structure. In the traditional model, a $69.99 game has “a breakout opportunity” to break even and generate profits through sales. However, in his view, with subscriptions, this mechanism disappears: “With the subscription model, Developers have no way to move beyond the break-even point and start making money. In a sales-based system, you can break even and start making a profit; with a subscription, that doesn’t happen. ”
Redden admitted that for some independent studios, this model is feasible. It’s no coincidence that several developers have praised Game Pass in the past. But for AAA games with large budgets and long development cycles, the situation is different: the costs are higher, the risks are greater, and the need to recover investment is more urgent.
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Layden points out that this is exactly why PlayStation chose Don’t add first-party games to PlayStation Plus at launchwhile Microsoft took the opposite path:
“Basically, a $69.99 game only has one chance to break through and generate profits. This is where the subscription model collides. PlayStation didn’t go in this direction when it launched AAA games. Microsoft did. Everyone can judge for themselves.”
