Microsoft’s acquisition of Activision Blizzard and Zenimax Media – the owners of Bethesda – proves that the tech conglomerate is trying to add more games to its Xbox Game Pass.
In a Microsoft blog post, Phil Spencer, CEO of Microsoft Gaming, stated that the company intends to add Activision Blizzard’s titles, including Call of Duty, Overwatch, and World of Warcraft, to the Xbox Game Pass.
This follows the announcement made during the Xbox and Bethesda Games Showcase earlier this year that Bethesda’s highly anticipated Starfield and Redfall will be available on Xbox Game Pass on release day.
Microsoft needs games
Microsoft wants to add more games to its Xbox Game Pass so that it can have a massive library of games with high user interest.
The attempted purchase of Activision Blizzard’s well-established franchises means that the Xbox Game Pass will have more games with vast fanbases.
This is a similar approach to that of video streaming services – Disney’s CEO, Bob Iger, confirmed that the company’s $71.3 Billion purchase of Fox boiled down to the need for content on Disney+.
Not only does Microsoft need content, but they also need quality content.
Over the last decade, Sony and Nintendo have released far more commercially and critically successful exclusives than Microsoft.
Xbox’s exclusives have not received a single Game of the Year nomination for an entire decade, whereas Sony and Nintendo have had 12 and 9 over the same period, respectively.
The somewhat mediocre exclusive content means that the service needs Activision Blizzard’s and Bethesda’s popular series to keep it relevant over the next few years.
In addition, Microsoft needs the Xbox Game Pass to succeed, as its hardware sales are not enough to make its gaming division profitable.
During last month’s Wall Street Journal Tech Live, Spencer noted that Microsoft lost $100 for every Xbox Series X and $200 for every Xbox Series S sold.
It is not uncommon for consoles to be sold at a loss, the PlayStation 4 was initially sold at a loss, but Sony subsidised that loss via PlayStation Plus and the sale of its exclusive titles.
Similarly, Microsoft is trying to negate the loss from its ninth-generation consoles through its Xbox Game Pass.
With rising inflation and Microsoft stating that it will not increase the price of its consoles, Microsoft is putting all its faith into its subscription service, which is why it needs more prevalent games for its gaming division to survive.