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One of the reasons for Microsoft’s $2 trillion valuations is their move to subscription services such as Microsoft 365 for many of their products. Investors were therefore very happy when Microsoft launched Xbox Game Pass, their Netflix-like game subscription service for the Xbox and PC.
According to the head of Xbox Phil Spencer, however, despite Game Pass’s high profile, gamers still prefer traditional sales.
“Transaction is bigger than subscription,” said Spencer in an interview with the NY Times. “Subscription is growing faster, just because it’s relatively new. And with Game Pass, we were one of the first movers in that space. But the transaction business is very large. We still sell physical discs.”
At only $10 for an ever-growing library of more than 400 quality games, Xbox Game Pass is great value, but Spencer says Microsoft will cater for both models.
Buying discs is a “traditional part of gaming,” and not something Microsoft plans to phase out.”So let’s make sure we offer our customers choice between subscriptions and transactions,” he said.