Microsoft may be considering the possibility of introducing new tiers to its Game Pass subscription model, including an ad-based model that could allow players access to the games in the library, in return for watching streamed advertisements.
In an interview transcribed by Tweaktown from the Wells Fargo TMT Summit, Microsoft Chief Financial Officer Tim Stuart said, “It also helps us…on geographic expansion. The vision I like to talk about is we have xCloud game streaming so that you can subscribe to Game Pass Ultimate and you can stream hundreds of games to really any endpoint that has a browser experience.
“For models like Africa, or India, Southeast Asia, maybe places that aren’t console-first, you can say, ‘hey, do you want to watch 30 seconds of an ad and then get two hours of game streaming?’
“Africa is, you know, 50% of the population is 23 years old or younger with a growing disposable income base, all with cell phones and mobile devices, not a lot of high-end disposable income, generally speaking.
“So we can go in with our own business models and say… there are millions and millions of gamers we would never have been able to address there, and now we can go in with our business models.”
It appears that the model is therefore being looked at as a way to develop a Game Pass audience in countries where the take-up of expensive gaming consoles is not high and would be a means of getting gaming into the hands and pockets of a new audience of players. Netflix has recently introduced an ad-supported tier in a bit to stop subscriber slowdown as increased costs bite across the globe. Microsoft may be looking at a different option to that here as there is no suggestion that an ad-supported tier would necessarily be added to its existing Western model of a monthly subscription.
Microsoft is already poised to surpass Sony PlayStation in revenue generation for the first time and with their recent acquisition of Activision Blizzard, is setting up for a strong second half of the decade ahead.
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