Let’s take a look behind the scenes at GamesBeat a little bit. Coming out of the Electronic Entertainment Expo trade show last week, one of our stories had significantly more traffic than anything else. I’ll give you a chance to guess. It had nothing to do with Zelda, Halo, or Xbox’s Project Scarlett console. No — our biggest story of E3 was about the new Microsoft Flight Simulator.
I bring this up to illustrate a point. Flight Simulator has a significant and passionate fan base. At the same time, it’s also not going to appeal to the 9 million people buying Marvel’s Spider-Man in its first couple of months of release. It’s a hardcore re-creation for flight fans. Players are so passionate because the game-development market is broken and no one is serving them.
Game Pass is enabling variety
One of the problems of game development over the last 10 years is that costs have gone up and introduced a lot of risk for every project. Big publishers used to have huge lineups of games across a variety of genres. That has shriveled up because making a game is so expensive that anything less than a blockbuster smash hit isn’t worth it.
The time and money that goes toward a mid-tier game with a small-but-dedicated audience is time and money that could go toward the next Call of Duty or League of Legends. That has pushed out games like Microsoft Flight Simulator. So why is it back now? Because of Game Pass.
With Xbox Game Pass, Microsoft gives subscribers a roster of more than 100 games — just like Netflix. It also includes all of Xbox Game Studios releases with no release delay. The idea is to attract subscribers and then to keep them around with a lot of content and frequent new additions.
Service games have changed the value perception
But Game Pass changes the incentive structure for Microsoft. And that aging incentive structure, where people vote which games they want with their gaming time and dollars, is something that Xbox boss Phil Spencer has lamented in the past.
“If I look at the top games that people are playing on Xbox One today, many of those games are three or four years old,” Spencer said during an interview with Giant Bomb in 2017. “That didn’t used to be the case. You would buy a cartridge, play it, and then swap it out for the new one.”
But more of people’s free time is going toward live-service games. And that is one of the reasons that Microsoft stopped investing in first-party games as much during the Xbox One generation.
Spencer saw the data. People were putting hundreds of hours into Destiny, and almost no one was finishing single-player story driven games.
And back in 2017, when Game Pass was just a collection of old games and didn’t immediately include every Xbox Game Studios release, Spencer basically revealed his plan for the service.
“So maybe I don’t want to spend $60 on a game that has a beginning, middle, and end,” he said. “I hope it doesn’t get to that point. But maybe there’s a different business model. I don’t know if it’s going to work, but we’re going to try. Because we want all kinds of games to be successful. We don’t want to see the death of [certain kinds of] games.”
A business model where Flight Simulator makes sense
For years, Spencer has seen what Game Pass could turn into. And his inspirations aren’t exactly a secret. The idea comes from Netflix.
“I see what’s happening in television, and there’s some great content being made,” Spencer said in 2017. “And it’s because the subscription model has enabled companies like Netflix and HBO to invest in some great television … and if that [model] can fund different kinds of games being developed, then I think that’s a great thing.”
And now here we are in 2019, and Microsoft just announced what I think is its most varied lineup in years at E3.
It has Flight Simulator, the single-player Blair Witch horror adventure, and the side-scrolling Battletoads beat-’em-up. That’s on top of its traditional blockbuster projects like Halo Infinite and Gears 5. And that doesn’t include the online multiplayer battler Bleeding Edge from Ninja Theory, or whatever studios like Obsidian, InXile, and Double Fine end up making when they finish their projects they were already working on with other publishers.
These games no longer have to convince players to spend $50-to-$60 in a couple of weeks to end up as successes. Instead, they just need to contribute to the reason a certain group of people continue to subscribe to Game Pass.
That’s why Flight Simulator makes sense again. As a standalone product, the game is a tough sale to that broader audience. Xbox Game Studios could try to change it to appeal to more people. Or it could try to add aggressive monetization to generate more revenue from a smaller audience. Or it could just stop making those games.
But on Game Pass, Flight Simulator isn’t trying to win your $60 away from something else. It’s additive to the experience of subscribing to the service. You didn’t buy Flight Simulator instead of Halo — you subscribed to Game Pass, so now you get Flight Simulator and Halo and Sea of Thieves and dozens of others.
And the list of games that keep people subscribing is going to look different for each person. That’s the point. Microsoft can afford to look a little bit deeper down into our individual tastes. Maybe Halo, Sea of Thieves, and Flight Simulator is enough to keep me paying $15 a month. For you, however, maybe the list is Halo, Fallout 4, and Outer Wilds.
This completely flips the thinking when it comes to funding games. Instead of making a singular product that appeals to as many people as possible, Microsoft needs to release games to build a library that appeals to as many people as possible.
And that means we’re getting a new Flight Simulator, and I hope that’s just the start.
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