Xbox Game Pass: Cannibalization or Investment?

Microsoft’s blockbuster acquisition efforts for Activision Blizzard have generated many interesting conversations about the future of video games, with industry experts and gamers alike pondering the ideas and impacts of everything from monopolization, monetization, and now CANNIBALIZATION within the gaming marketplace. Yes, you read that correctly… as part of the release of data and information as Microsoft presents their legal case for successfully purchasing Activision Blizzard, one of the largest gaming studios in the history of gaming, a fascinating tidbit of financial information has leaked out concerning one of Microsoft’s largest efforts to disrupt the way we purchase and experience games, the Game Pass. Specifically, Microsoft is finally admitting that their Game Pass service cannibalizes the actual sales numbers of the games included in the service… something most of us assumed was true but couldn’t actually prove. While this data doesn’t speak to additional money made off of licensing agreements or additional DLC purchases, the truth is that allowing gamers to simply download major first-party titles like Halo Infinite or Gears of War 5 on day one or other popular games such as Minecraft HAS to limit the amount of those games that are actually purchased at their full retail price. And now that we have heard this information directly from the source, we have to look at the entire Game Pass service in a brand-new light.

For the uninitiated, the Microsoft Game Pass is a service that can be purchased in a variety of methods including monthly or annually, giving members full access to a massive catalog of games that can be downloaded or streamed by the player for as long as their membership is active. While this service does come at a cost, even at its’ most expensive option ($14.99 a month), it is still FAR cheaper than purchasing a new game each month… so when a game that would normally cost $60-$70 for purchase (like the upcoming Starfield) is able to be played from its’ launch date for an entire month for $14.99 or less, this absolutely means that gamers can download, play, and finish the game for a fraction of the cost that these games would have cost if purchased through traditional retail channels. Sure, the game is not actually OWNED by the player, and a persistent online connection must be present in order to maintain access to the game, but the truth is that seeing multiple games through to completion from the opening cinematic to the end credits is now something that can be done for less than the price of a movie ticket and a small popcorn. And for this to be possible, SOMEONE has to pick up the tab and pay the ever-growing developmental costs to create these gaming experiences and offer them for this price. And since Microsoft is certainly not doing this for charitable reasons, there must be a different, more long-term strategy at play.

Microsoft is still a company with earning commitments, shareholders, and investors that it must keep happy to remain in a position to pursue acquisitions such as Activision, so how do they balance the idea of paying billions of dollars for a new studio with the truth that they will turn around and offer titles like the next Call of Duty as an included part of their Game Pass service? Well, it is all part of their long-term plan to dominate the gaming marketplace for years to come… by redefining the gaming marketplace through their Game Pass service. The only path to get there will take years of costly investments, many of which will not yield any immediate returns. As a matter of fact, these sacrifices may not deliver ANY short-term benefits other than increasing the number of subscribers to the Game Pass service. But making these sacrifices to give away their biggest and best franchises as a part of this membership service at the cost of cannibalizing their current sales opportunities is a smarter business decision than many may think… in a world where many of us seek immediate gratification and expect rapid results to our efforts, Microsoft is playing the long game. They aren’t giving away their money… they are investing it into a future that offers a far more lucrative payout than the meager pittance of the profit margins they could enjoy at this present time.

This exact same concept is present in the life of every human being, with daily choices we are compelled to make with similarly far-reaching ramifications. Are we seeking a quick return on our investments of time, energy, and efforts or are we making short-term sacrifices for a long-term gain? Are the decisions we are making today going to improve our current state of existence, or supply us with future comfort and enjoyment? It is a conundrum that we face every time we look at the 24-hour period of time we are faced with each day and make decisions on how to fill it. What do I NEED to do? What would I LIKE to do? What is truly necessary, important and beneficial? There is a war we all fight in every choice to either make this current moment more satisfactory or provide our future self with an advantage… and these answers are not always easy. And when it comes to our walk with Christ, Jesus had a very simple but profound message to share that should enlighten us on His views on the matter.

Matthew 13:44-46 “Again, the kingdom of heaven is like treasure hidden in a field, which a man found and hid; and for joy over it he goes and sells all that he has and buys that field. “Again, the kingdom of heaven is like a merchant seeking beautiful pearls, who, when he had found one pearl of great price, went and sold all that he had and bought it.

Jesus chose two very specific and similar analogies to enlighten us on the “kingdom of heaven” and what our pursuit of it should look like. Keeping this in context with the other analogies in this same chapter (the women hiding the “kingdom of heaven” in her dough and the “kingdom of heaven” growing like a mustard seed), it is clear that in these analogies WE are the ones searching for the treasure, and the kingdom of heaven is the treasure we are seeking. And in both of these stories the EXACT same language is present when the “treasure” is found… the reasonable response is that the seeker sells all that they possess to acquire the treasure that could not be gained any other way. This is consistent with other occasions of “seekers” who came to Jesus looking for access to the benefits of following Him, and sadly in most of these interactions the price was higher than they were willing to pay…

Mark 10:17-22 Now as He was going out on the road, one came running, knelt before Him, and asked Him, “Good Teacher, what shall I do that I may inherit eternal life?” So, Jesus said to him, “Why do you call Me good? No one is good but One, that is, God. You know the commandments: ‘Do not commit adultery,’ ‘Do not murder,’ ‘Do not steal,’ ‘Do not bear false witness,’ ‘Do not defraud,’ ‘Honor your father and your mother.’” And he answered and said to Him, “Teacher, all these things I have kept from my youth.” Then Jesus, looking at him, loved him, and said to him, “One thing you lack: Go your way, sell whatever you have and give to the poor, and you will have treasure in heaven; and come, take up the cross, and follow Me.” But he was sad at this word, and went away sorrowful, for he had great possessions.

Luke 9:57-62 Now it happened as they journeyed on the road, that someone said to Him, “Lord, I will follow You wherever You go.” And Jesus said to him, “Foxes have holes and birds of the air have nests, but the Son of Man has nowhere to lay His head.” Then He said to another, “Follow Me.” But he said, “Lord, let me first go and bury my father.” Jesus said to him, “Let the dead bury their own dead, but you go and preach the kingdom of God.” And another also said, “Lord, I will follow You, but let me first go and bid them farewell who are at my house.” But Jesus said to him, “No one, having put his hand to the plow, and looking back, is fit for the kingdom of God.”

Tough words indeed… here were some people who clearly desired to follow Jesus and had even already made some sacrifices and commitments to place them into a position to do so. But following Jesus is not a part-time effort, and while this is tough medicine for each of us to swallow, here is an uncomfortable truth to reconcile… while His grace is completely free for all of us to receive, access to the kingdom of heaven comes with a costly lifetime commitment. A cost that Christ explicitly states that we should consider before we even begin to undertake this journey. While the future benefits of a life lived in service to Christ are truly without comparison, all of these verses when taken together tell the exact same story… the kingdom of heaven is called a “pearl of great price” for a reason. Our ACCESS to it has been provided to us by Christ’s sacrifice and gift of grace… but we still have to be willing to give all that we have in exchange to possess it.

Luke 14:25-33 Now great multitudes went with Him. And He turned and said to them, “If anyone comes to Me and does not hate his father and mother, wife and children, brothers and sisters, yes, and his own life also, he cannot be My disciple. And whoever does not bear his cross and come after Me cannot be My disciple. For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it— lest, after he has laid the foundation, and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish’? Or what king, going to make war against another king, does not sit down first and consider whether he is able with ten thousand to meet him who comes against him with twenty thousand? Or else, while the other is still a great way off, he sends a delegation and asks conditions of peace. So likewise, whoever of you does not forsake all that he has cannot be My disciple.

Here is the truth we all must reconcile… the same one that Microsoft is embracing as they willingly forego the profits of the present to invest into the Game Pass service of the future. Our pursuit of Christ is not something we can simply add to our day as a part of our routine and expect that to be acceptable to the Lord. Over and over again He challenged those who were giving “some” with the command that He can only accept “all”. While the little we have pales in comparison to both the present and future benefits of a life fully committed to Him, we still must lay all of our desires, passions, goals, relationships, and possessions at His feet to receive them. The ONLY path to eternal life is through Christ… and He has made it abundantly clear that while He paid the full cost for us to receive it, we must make the decision to relinquish all that we consider ours in order to enter into it.

Mark 10:23-20 Then Jesus looked around and said to His disciples, “How hard it is for those who have riches to enter the kingdom of God!” And the disciples were astonished at His words. But Jesus answered again and said to them, “Children, how hard it is for those who trust in riches to enter the kingdom of God! It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God.” And they were greatly astonished, saying among themselves, “Who then can be saved?” But Jesus looked at them and said, “With men it is impossible, but not with God; for with God all things are possible.” Then Peter began to say to Him, “See, we have left all and followed You.” So Jesus answered and said, “Assuredly, I say to you, there is no one who has left house or brothers or sisters or father or mother or wife or children or lands, for My sake and the gospel’s, who shall not receive a hundredfold now in this time—houses and brothers and sisters and mothers and children and lands, with persecutions—and in the age to come, eternal life. 

I doubt that the people who stand to financially gain from Microsoft’s investment into the Game Pass service were immediately excited about pouring large sums of money into a library of games that were going to be given away to subscribers for a fraction of their value. The amount of time it will take for this service to balance out with the normal profit that these games would have achieved if sold through standard retail channels could be substantial. The break-even point could be many, MANY years into the future. But Microsoft made these decisions with full awareness that their short-term gain would be minimal at best… the Game Pass was never about harvesting these “pearls” for a quick buck. They are seeking to make Game Pass the primary method of game delivery in a future that is currently beyond our comprehension… a world that they are making massive investments into so that when that day comes, they will be in a position to reap the richest rewards. They are buying the field that contains the hidden treasure, at a MASSIVE cost to their current status quo. If they are betting wrong, they have everything to lose. But if they are RIGHT, the entire world of gaming will be their oyster one day… and the most valuable pearl of all will be in their possession because they were willing to forego the comforts of the present in order to pay the price for it.

1 Corinthians 15:19 If in this life only we have hope in Christ, we are of all men the most pitiable.

Romans 8:18 For I consider that the sufferings of this present time are not worthy to be compared with the glory which shall be revealed in us. 

If Microsoft was pouring all of this money into Game Pass to maximize their current stock value for an immediate payout, we would consider them to be fools. The path of short-term pain and sacrifice for long-term gain and benefit is NOT designed for those who want rewards that will last beyond their current appetites. This is an action that only makes sense to those who are fully committed and sacrificially invested into a future that requires both patience as well as faith to see. And the same is true for us as followers of Christ… in the immediacy of the present, the words of Christ to give all that we have in pursuit of Him are challenging and all-encompassing. The gate to following Him is described as narrow and difficult for a reason (Matthew 7:13-14)… it is intentionally designed to require us to shed all that we are carrying in order for us to press through it to the other side. As Paul shared in 1 Cor. 15:19, if we only stand to gain from our relationship with Christ in this present age, we are the most pitiable of all humans on this planet. But as His followers, we freely make these sacrifices of our time, energy, and pursuits because we are not looking at mere short-term, immediate gratification for these efforts… we are INVESTING in a future beyond our comprehension, giving all that we have to possess a treasure that is far beyond the value of what we currently possess.

Philippians 3:7-11 But what things were gain to me, these I have counted loss for Christ. Yet indeed I also count all things loss for the excellence of the knowledge of Christ Jesus my Lord, for whom I have suffered the loss of all things, and count them as rubbish, that I may gain Christ and be found in Him, not having my own righteousness, which is from the law, but that which is through faith in Christ, the righteousness which is from God by faith; that I may know Him and the power of His resurrection, and the fellowship of His sufferings, being conformed to His death, if, by any means, I may attain to the resurrection from the dead.

Is there a cost associated with following Christ? Absolutely… our entire mind-set has to be completely surrendered and over-written by Him to align with the new direction we are pursuing (Romans 12:1-2). We will give up many things in our endless pursuit of Him, but once we truly understand the value of what we are chasing vs. the temporary and limited value of what we currently possess, we will make a “Game Pass” decision in our lives as well… what we stand to gain from these sacrifices is of far greater value than the temporary benefits of a life lived in service to our present desires (Philippians 3:7-8). Let’s give what we don’t truly possess to gain the future rewards that are valuable beyond measure… and in our all-encompassing pursuit of Him we will find an eternal treasure that we can never lose that will make these short-term sacrifices worth it.

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