While successful, the current Xbox Game Pass model is hampered by its reliance on console sales, a conclusion supported by lackluster success in the hardware market compared to PlayStation. Although Microsoft has invested heavily in gaming in recent years, studio closures and the disappointing market foothold aren't beneficial for anyone. However, if the console strategy moved toward a platform available across devices, the costs could go to servers and studio maintenance. A shift towards a purely digital, cloud-based Game Pass would have considerable advantages for both Microsoft itself and for Xbox users.
A video game streaming landscape dominated by Game Pass might still seem like an unlikely or undesirable future, but there are plenty of reasons why this path forward could have its own benefits. PlayStation's recent addition of cloud streaming already shows that Xbox's most direct competitor is catching up in this key market. If Microsoft doesn't hurry up, Xbox could miss an ample opportunity to dominate the next frontier of gaming.
Xbox's console-centric strategy is a losing battle against Sony, primarily due to insufficient console sales to justify the significant investment. The cost of manufacturing and marketing consoles, coupled with increasingly competitive pricing, severely impacts profitability. Speaking with in 2022, Xbox head Phil Spencer said that the company lost $100-$200 on the sale of every console, and although those numbers may no longer hold true, the money certainly isn't in moving hardware.
Xbox Game Pass will see eight titles leave on November 30. Online discussion has suggested that subscribers are a bit upset at this month's losses.
The real profit lies in game sales where Game Pass could help Xbox overtake PlayStation. Focusing on hardware necessitates a substantial market share to achieve profitability, a position Xbox currently doesn't hold. Microsoft is putting Game Pass on more and more devices, however. If enough devices have Game
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Phil Spencer