Microsoft Games Pass effect: Early signs Gears 5 isn't selling well compared to Gears 4

[crispy4000]

The lower retail sales could be chalked up to a larger trend in the UK (and here too).  But the bigger story is that "Packaged software + full game downloads of Gears 5 are much lower than prior entries of the series."

Expected?  Not totally.  Throughout last year, Microsoft's stance was that their own games were selling ahead of expectations due to the added exposure Games Pass brought.  Sea of Thieves in particular was a poster child, followed by more success stories.  This is what the Games Pass effect was:

 

The turning point came this year, with Crackdown 3, which was marketed heavily as a Game Pass project.  Live-action advertisements focused on just that.  $1 subscriptions.  It was a cheap rental essentially, and gamers treated it as such.  The game failed to chart on NPD top 20 (like Control ), but made it to #3 most played on the weekly Xbox One charts, behind Apex and Fortnite.

 

I think that's when the public consciousness of Games Pass reached a critical mass.  That could be expected to have an effect on Gears 5.  By how much in the US?  We'll have to wait for NPDs.  But if it performs similarly to the UK, that marks a change for a big ticket franchise for them.

Games Pass is obviously a longer term investment than the sale potential of a single AAA title.  I don't think it'll be as much of factor for Halo Infinite - lots of people will want to own that I'd guess.  But this all raises questions for how long honeymoon period with Games Pass promotions can last.  Or if Netflix-style price hikes are on the cards for next-gen (with or without more competition).

[crispy4000]

Gears 5 also had considerable Games Pass promotion.  Maybe not quite as much as that Terry Tate ad, but still, a lot.

Here's another take from someone with insider knowledge:
 

At the very least, GP will have a huge impact on awareness of Microsoft's franchises going forward.

[TheLeon]

A big part of their E3 was about how all of their games are coming to Game Pass. Now that it's been around for a while, I'm not surprised that sales are down. 

[Dodger]

I also saw somewhere on ERA that someone at MS mentioned that Gears 5 has lead to a surge in GP subs, which is what they really care about. So it can still be a big success if it drives GP subs even if it's sales are lower. 

[XxEvil AshxX]

It'll be interesting to see how this plays out in the long run, especially once Scarlet is released. No doubt they're banking on getting people invested in the ecosystem, even if gradually. Next year when the Scarlet and PS5 are going head to head, and consumers are debating which one to buy, MS is already going to have a pretty healthy library of games to not only play on it, but pick up where they left off on their XBO. And if every (first party) game is day one on Game Pass, any launch titles on Scarlet will be available to them as soon as they get home and boot up their new console.

 

I have to admit, buying a brand new console and not having to worry about which launch games I have to choose to buy with it is pretty damn exciting.

 

I'd bet they're more than willing to take that perceived dive in sales to get that hook sunk in.

[crispy4000]

2 hours ago, Dodger said:

I also saw somewhere on ERA that someone at MS mentioned that Gears 5 has lead to a surge in GP subs, which is what they really care about. So it can still be a big success if it drives GP subs even if it's sales are lower. 

 

'Success' has a bunch of layers here.  But it boils down to larger and more consistent profits, especially long term.  That is what they care about.  Subscriptions would just be a means to that end.
 

On the surface, a Games Pass sub is equivalent to purchasing one first party game digitally every 6 months.  $10 a month for 6 months = $60.  Compare that to where Microsoft was for much of this generation in their game output, and it sounds great.  It's much more consistent for them.  They can count on more people playing their games, bringing more exposure to their franchises.  That's the biggest play, IMO.

 

The trouble is in the weeds.  They've been doling out payouts to publishers big and small to bolster the service with current releases.  It's an expensive proposition to maintain, not unlike Epic's display of cash muscle lately.  Several major publishers also aren't playing ball (Activision, EA, Ubisoft), or have expressed desire to branch out alone (SquareEnix).  Namco recently swore off the service as a threat and delisted everything they had on it.  I think it's all a sign that this is going to very expensive battle for Microsoft, or really, for anyone else who wants to be the 'Netflix' of games.  And like with Netflix itself, I don't think that's a very sustainable goal here in 2019.  The future is about splintering off.

 

Also, Microsoft's promotions are very aggressive.  Their latest pitch is to rent Gears 5 (and more) for 2 months for $2.  That could be a lot of revenue to recoup from an otherwise $60 release.  Getting those subs isn't even the hard part.  It keeping them when other companies steal pages out of their playbook and branch out.

[best3444]

What's surprising about this? 

[crispy4000]

13 minutes ago, best3444 said:

What's surprising about this? 

 

Watch the video.  It's mainly the trend reversal from Forza Horizon 4, MS's last big AAA game.

[crispy4000]

2 hours ago, XxEvil AshxX said:

It'll be interesting to see how this plays out in the long run, especially once Scarlet is released. No doubt they're banking on getting people invested in the ecosystem, even if gradually. Next year when the Scarlet and PS5 are going head to head, and consumers are debating which one to buy, MS is already going to have a pretty healthy library of games to not only play on it, but pick up where they left off on their XBO. And if every (first party) game is day one on Game Pass, any launch titles on Scarlet will be available to them as soon as they get home and boot up their new console.

 

I have to admit, buying a brand new console and not having to worry about which launch games I have to choose to buy with it is pretty damn exciting.

 

I'd bet they're more than willing to take that perceived dive in sales to get that hook sunk in.

 

Yeah, that's a really good pitch.  Especially with launch games.  I don't know if many 3rd party launch titles would launch on GP, but it would be a huge power play if Microsoft secured that.  Then again, they have Halo coming, so why bother...
 

That was one of things game rentals were good for.  You could try out the muscle of your new machine without breaking the bank.  Plus launch games aren't things you always want to buy.

[number305]

- Biggest launch for ANY Xbox 1st party game this generation

- 3 Million Players launch weekend

- 2x the number of players at launch as Gears 4

- On PC Gears 5 has nearly tripled the performance of Gears 4 and is the biggest Game Pass launch ever

Info taken from @BenjiSales on twitter.

 

This game is doing what MS wants it to.  Getting subscribers is the long term goal.  Not game sales, not hardware sales.

[Commissar SFLUFAN]

3 minutes ago, number305 said:

This game is doing what MS wants it to.  Getting subscribers is the long term goal.  Not game sales, not hardware sales.

Absolutely!

 

Microsoft is "all-in" with every aspect of the GAAS concept, so the lack of physical sales is largely irrelevant to them.

[TomCat]

Phil is looking at the data like "Problem I dont see a problem at all."

[Spawn_of_Apathy]

21 minutes ago, crispy4000 said:

 

Watch the video.  It's mainly the trend reversal from Forza Horizon 4, MS's last big AAA game.

It’s still not surprising. The option to play a game for 1/6 the cost with no commitment. When titles release day and date on game pass, I’m more surprised to hear there are ANY actual $60+ sales of the game. 

 

It it would take 7 months of game pass if Gears 5 was the ONLY game on the platform you played until you lost money with Gamepass vs Retail/Digital. 

 

and Physical has been declining hard already. Years ago UK hit the turning point where more than half of all sales were digital. 

 

Hearing Gears 5 move less physical copies than Gears 4 should surprise no one. It should be expected, even if Gears 5 had 3x the people logging in to play day 1. 

[Mr.Vic20]

I'll let MS worry about its financials, I'm quite pleased with their service and Gears 5 was a great ride! 

[crispy4000]

10 minutes ago, SFLUFAN said:

Absolutely!

 

Microsoft is "all-in" with every aspect of the GAAS concept, so the lack of physical sales is largely irrelevant to them.

 

Eh, I'm not so sure about that.  It's a component, but I think that was more of EA's motivation with Origin initially.  This to me just seems like a play to be ahead of the market, and not to have to put all in their eggs into the basket they've fought Sony over.

[crispy4000]

32 minutes ago, number305 said:

- Biggest launch for ANY Xbox 1st party game this generation

- 3 Million Players launch weekend

- 2x the number of players at launch as Gears 4

- On PC Gears 5 has nearly tripled the performance of Gears 4 and is the biggest Game Pass launch ever

Info taken from @BenjiSales on twitter.

 

This game is doing what MS wants it to.  Getting subscribers is the long term goal.  Not game sales, not hardware sales.

 

I agree that sales aren't as important to Microsoft for this game as is using it as leverage for Games Pass.  That's been the story of every MS release since Sea of Thieves.  Doesn't mean that sales impact is irrelevant though.  It all factors into Games Pass' future beyond this initial push.  Not whether it exists, but how it sustains.

On that tweet, all was from the PR release:  https://news.xbox.com/en-us/2019/09/16/gears-5-breaks-records-as-biggest-launch-for-any-xbox-game-studios-game-this-generation/

 

Quote

Thanks to the incredible support from our fans, Gears 5 kicked off the Holiday season strong – attracting over three million players in its opening weekend and setting new records for Xbox Game Pass with the biggest launch week of any Xbox Game Studios title this generation. The performance easily doubled the first week’s debut of Gears of War 4 and made Gears 5 the most-played Xbox Game Studios title in its first week since 2012’s Halo 4. First week performance includes the four-day early access period beginning Friday, September 6, which was exclusive to Gears 5 Ultimate Edition and Xbox Game Pass Ultimate members. On the PC, Gears 5 has nearly tripled the performance of its predecessor, becoming the biggest-ever launch for Xbox Game Pass for PC, and Xbox Game Studios’ best-ever debut on Steam.

 

Might be some spin there regarding "performance" strictly as player numbers.  Or maybe not.  We'll know soon enough.

[atom631]

As other have mentioned, this seems to be exactly what MS is hoping for. Subscriptions up, single game sales down. 

 

I for one wouldve gotten Gears 5 day one no matter what... didnt have to with GP. 

[JPDunks4]

People constantly talking about MS losing out on the $60 sale for these $1.00 deals.  Fortnite is Free.  R6 Siege was hardly a full price game for most that bought it, yet it still makes it on NPD's due to the seasonal content updates.  I think these companies are really looking at long term player engagement, and getting more and more people to simply be able to play their games, get invested in those games, and hopefully pay for MX's.  So many of the biggest games this gen are the ones killing it with Seasonal Content and having people constantly reinvesting money back into those games.  

 

Now I have no idea if MS would make Seasonal Content Free with Gamepass.  But if Gears introduced like a Seasonal Battle Pass for $10.00 to unlock new skins, ect ect by doing Horde, PvP, or Escape, if they can get a few of those millions to get invested into that, it's a gift that keeps on giving.  

 

F2P has been proven to work if you can deliver a good game and good Seasonal Delivery model.  I just see MS having a Subscription Model and essentially making the barrier of entry to play their games lower to get higher populations on those game to be able to invest in the long term revenue streams.  

[crispy4000]

38 minutes ago, Spawn_of_Apathy said:

It’s still not surprising. The option to play a game for 1/6 the cost with no commitment. When titles release day and date on game pass, I’m more surprised to hear there are ANY actual $60+ sales of the game. 

 

It it would take 7 months of game pass if Gears 5 was the ONLY game on the platform you played until you lost money with Gamepass vs Retail/Digital. 

 

and Physical has been declining hard already. Years ago UK hit the turning point where more than half of all sales were digital. 

 

Hearing Gears 5 move less physical copies than Gears 4 should surprise no one. It should be expected, even if Gears 5 had 3x the people logging in to play day 1. 

 

I agree, it wouldn't be surprising to see Gears 5 sell less physical (and digital) copies than 4.

It's more surprising that to hear this wasn't the norm in 2018 for 1st party titles, all the way up to Forza Horizon 4.  And that Phil was still using that line as if it would stay relevant.

To be fair, I think for some indie games, it still might hold.  Decenders is one.  But probably not for AAA anymore.

[Firewithin]

Continuous subs > one time purchase 

[crispy4000]

46 minutes ago, JPDunks4 said:

People constantly talking about MS losing out on the $60 sale for these $1.00 deals.  Fortnite is Free.  R6 Siege was hardly a full price game for most that bought it, yet it still makes it on NPD's due to the seasonal content updates.  I think these companies are really looking at long term player engagement, and getting more and more people to simply be able to play their games, get invested in those games, and hopefully pay for MX's.  So many of the biggest games this gen are the ones killing it with Seasonal Content and having people constantly reinvesting money back into those games.  

 

Now I have no idea if MS would make Seasonal Content Free with Gamepass.  But if Gears introduced like a Seasonal Battle Pass for $10.00 to unlock new skins, ect ect by doing Horde, PvP, or Escape, if they can get a few of those millions to get invested into that, it's a gift that keeps on giving.  

 

F2P has been proven to work if you can deliver a good game and good Seasonal Delivery model.  I just see MS having a Subscription Model and essentially making the barrier of entry to play their games lower to get higher populations on those game to be able to invest in the long term revenue streams.  

There's truth in that, although I think Microsoft's is much more concerned at the moment with being the subscription market leader than cashing in.  It's a lot safer for them to build a house weighted on subscriptions than MTX.

It's also where they face their biggest challenge.  Fortnite is Free.  So is Apex.  R6 Siege has a huge following.  So does PUBG.  Overwatch.  Destiny 2.  Call of Duty.  GTAV.  There's at least a dozen live service games, paid for or not, that dominate the landscape.  It's cutthroat.

Microsoft has the franchises to do it.  Already have Minecraft.  Games Pass could give a few others that boost.  But all the major publishers want a piece of the live service pie, and will be thinking in terms of accessibility and reach.  (and subscription $)

[nublood]

54 minutes ago, Firewithin said:

Continuous subs > one time purchase 

 

I canceled GP about 6 months ago and I haven't felt compelled to reinstate it. Maybe the next Halo could change my mind...

[number305]

24 minutes ago, nublood said:

 

I canceled GP about 6 months ago and I haven't felt compelled to reinstate it. Maybe the next Halo could change my mind...

It is getting pretty hard to argue that GP isn't the best value in games right now.  It might not be good for you - but for many people there is a wide variety of games that gets added to constantly.

[TheLeon]

9 minutes ago, number305 said:

It is getting pretty hard to argue that GP isn't the best value in games right now.  It might not be good for you - but for many people there is a wide variety of games that gets added to constantly.

Yep. I feel like it's all I'm talking about on here recently, but I'm trying to stick to a pretty tight gaming budget. Game Pass and the occasional Humble Bundle go a long way. 

[Commodore D]

11 minutes ago, TheLeon said:

Yep. I feel like it's all I'm talking about on here recently, but I'm trying to stick to a pretty tight gaming budget. Game Pass and the occasional Humble Bundle go a long way. 

Game pass has pretty much eliminated my gaming budget. It was already close to zero because of Bing Rewards; combine that with the Ultimate Gamepass upgrade and I’m good well through 2021. I’ll use the reward points I’m stacking now on the next UGP deal.

[Dodger]

GP has greatly reduced how much I spend. I did shell out for BL3 since well I probably won't buy anything else until FF7RE and Cyperpunk 2077. 

[Xbob42]

There's a reason you could get 2 months of Ultimate for $2 when Gears 5 launched. They're not interested in getting a single sale from you anymore. I mean, they'll gladly take it, I'm sure. But building up a stronger and stronger library over time and keeping you from unsubbing is clearly their end goal. Exclusives don't come out often enough (on ANY platform) for them to make more money from direct sales over keeping people subbed. And the more games you play through Game Pass, the less games you're buying, which makes it harder to stop paying, because your personal library becomes more and more tied to Game Pass, eventually you'd be losing damn near 100% of your relevant library of games if you let your subscription lapse, or as close to that number as they can hope to get, anyway.

 

We're still in the early days of their real plan with this, and I'm sure it'll really come into focus next gen.

[crispy4000]

6 hours ago, Xbob42 said:

There's a reason you could get 2 months of Ultimate for $2 when Gears 5 launched. They're not interested in getting a single sale from you anymore. I mean, they'll gladly take it, I'm sure. But building up a stronger and stronger library over time and keeping you from unsubbing is clearly their end goal. Exclusives don't come out often enough (on ANY platform) for them to make more money from direct sales over keeping people subbed. And the more games you play through Game Pass, the less games you're buying, which makes it harder to stop paying, because your personal library becomes more and more tied to Game Pass, eventually you'd be losing damn near 100% of your relevant library of games if you let your subscription lapse, or as close to that number as they can hope to get, anyway.

 

We're still in the early days of their real plan with this, and I'm sure it'll really come into focus next gen.

 

There was a time I thought similarly about Xbox Live Gold.  Your built-up friends list is there, so of course you'd want to stay subscribed and within that ecosystem.  Turns out that didn't matter, especially when generational shifts are involved.  Subscriptions aren't loyalty badges.

 

As for an additive library, the generation before that had PS3's backwards compatibility as a big initial selling point.  All the PS2 library is available to you.  It didn't help Sony for much of anything.  Or the Wii U.  Or the 3DS and Xbox One at launch.

I don't believe the mainstream market places a high priority on a library that goes forward with you.  Even if it did, Games Pass wouldn't be the right way to service that.  Only Xbox Games Studios games will reliably stick around for more than a year or two. If anything, Games Pass is training people to think that they don't technically need their own library, just a curated list where titles are swapped in and out.

 

Gamers ultimately care most about access to the content they want most.  And a "damn near 100%" monopoly on that content isn't possible.  So there's enormous potential for the major players in the industry to launch their own rival services on the back of their own franchises.  We shouldn't be talking about subscriptions in terms of attachment to a 'personal library.'  It should be more about how static or fluid subscription patterns will be once more competition enters the ring.   That's how subscription loyalty is tested.

[Xbob42]

I didn't mean a library that goes forward with you. Console gamers don't expect that and certainly won't care about it this early on. By next gen I meant that we'll see them really rolling this service out full force next gen. If competition is like any other subscription service, it will start out pretty good, and then instantly turn shitty as everyone thinks they can run their own sub service as they ruin everything.

 

On the other hand, MS and Sony could, I dunno, ban anyone else on the service from offering similar subscription services as the system(s) would already have something like that built-in. Unlike the PC, Sony, MS and Nintendo can lock down their platforms in a way where you can't just go make an Epic Games Store. Usually this is a shitty negative thing, but they could theoretically leverage it for the greater good and prevent people making games on their platform from running something that directly competes with their business model.

 

I don't expect that to happen, but it's one path forward I could see to avoid the fracturing we've seen with streaming movies and TV shows that has made that experience fucking trash.

[crispy4000]

I suppose the question is how much pull publishers have.  Sony and Microsoft have already given EA and Ubisoft a lot of room on this.  Before Sony caved, EA’s games were all getting early releases on Microsoft consoles through EA access.  They can pit the manufacturers against each other to try and get what they want.

 

Not sure we’d ever see it go so far as a publisher leaving entirely like EA did the Dreamcast.  But with streaming services looming and so many successful PC launchers, nothing is off the table entirely.

 

I think it’s more likely that Microsoft tries to convince EA/Ubisoft/etc to release their own add on packages, a la cable.  But even that might cause publishers to get cold feet, and give other platforms their incentives.

[DarkStar189]

18 hours ago, TomCat said:

Phil is looking at the data like "Problem I dont see a problem at all."

When I read your comment I instantly thought of Gamestop.  Picturing a ghost town with no one coming in to pick up their reserved games on launch day anymore.  Crazy how fast times are changing.

[crispy4000]

1 hour ago, DarkStar189 said:

When I read your comment I instantly thought of Gamestop.  Picturing a ghost town with no one coming in to pick up their reserved games on launch day anymore.  Crazy how fast times are changing.

 

Yup, that's already been the case for years with digital downloads and preloads.

[Commissar SFLUFAN]

 

[crispy4000]

2 hours ago, SFLUFAN said:

 

Eh, that was already the case when they stopped reporting console unit sales in 2015.

This means no more numbers for Xbox Live subscriptions, and gaming revenue will be given as %-YoY going forward.  Just a bit more obfuscation.

[crispy4000]

On 9/16/2019 at 9:55 AM, crispy4000 said:

...The turning point came this year, with Crackdown 3, which was marketed heavily as a Game Pass project.  Live-action advertisements focused on just that.  $1 subscriptions.  It was a cheap rental essentially, and gamers treated it as such.  The game failed to chart on NPD top 20 (like Control ), but made it to #3 most played on the weekly Xbox One charts, behind Apex and Fortnite.

 

I think that's when the public consciousness of Games Pass reached a critical mass.  That could be expected to have an effect on Gears 5.  By how much in the US?  We'll have to wait for NPDs.  But if it performs similarly to the UK, that marks a change for a big ticket franchise for them.

Update: Gears 5 debuted at #7 on NPDs.  That's higher than I was expecting, all considered.  But still challenges Phil's narrative that GP is a sales driver.

https://venturebeat.com/2019/10/17/september-2019-npd-nba-2k20-and-borderlands-3-top-the-charts/

By comparison, Gears 4 released at #3 back in 2016.