No surprises here that MS is willing to lose money in the short-term to enable GamePass to be a long-term play:
https://www.gamespot.com/articles/xbox-game-pass-is-not-a-big-moneymaker-right-now-b/1100-6480241/
Looking back on Netflix, HBO, and now Disney+...
- Netflix more or less pioneered the model by gaining enough subscribers on non-exclusive content to justify spending big budget money on developing in-house exclusive content.
- HBO was built on offering exclusive content since it is basically a cable service, but found a cash-cow in GoT and are now doubling down on even more exclusive content.
- Disney already has a huge loyal following and a wide catalog of content, so offering a subscription-based service and to develop in-house exclusives for that service was an easy decision.
Microsoft and GamePass are analogous to Netflix in terms of catalog of content, i.e. relatively mediocre non-exclusive content with some exclusive highlights here and there, but would like to develop even more in-house exclusives. Unlike Netflix, where Netflix had to wait until the financials worked out to really start pushing for developing in-house exclusives, MS has enough money in the bank to take the L in the short-term to get the train moving sooner.
Sony and PS Now, on the other hand, are like Disney+. Tons of AAA exclusives, each more or less a blockbuster in their own right, but you got to pay full movie ticket prices if you want to experience them on launch. Yeah, sure you can wait a month or two after a blockbuster comes out if you don't want to pay full retail, but let's not deny this model works. For older content, there's Playstation Now but you won't find brand spanking new AAA games on there. As an analogy, even Disney+ today is NOT the launch medium for Disney's full-theatrical release movies, and any consideration of such is only due to COVID-19 forcing their hands since people can't physically go to a theater. If a Disney blockbuster were to launch on Disney+, I wouldn't be surprised if it was a timed-exclusive at full rental price, entirely separate from the rest of the content, before finally integrating it into being part of the subscription service sometime later. Much later. From a business perspective, this is the only way they can recoup the development costs of such high-investment endeavors. Going back to Sony, if they expand upon their subscription service, it will remain how it is today where AAA games won't be available on the streaming service until months after launch
OR they offer two tiers of service, with the higher tier including any and all new games but at twice the monthly subscription fee. This tier would be a money saver if you're a gaming aficionado and typically buy every new game at retail price. This would be similar to a MoviePass, where it includes all new movies but to break even you'd have to be the type of person who routinely goes to the theater 3 or more times every month for it to make sense. Remember, these exclusives cost millions of dollars to develop (TLOU Part 2 was estimated to cost over 100 million) so to immediately place them into the same subscription tier as the other PS Now games would mean Sony has to take a financial hit, unless doing so means they double or triple the number of long-term (read: annual) subscribers overnight. Without an explicit policy to prevent it from happening, what's to prevent people from just subscribing for one month only to play a $60 game and then unsubscribe? Offering a time-exclusive period and/or a higher tier of subscription would solve this issue.
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