Ed Fries, a former executive at Microsoft, said he feared the Game Pass subscription service could have a disruptive impact on the gaming industry.
In an interview with the Xbox Expansion Pass, Fries also addressed his fear that Game Pass will become the dominant business model like Spotify. In fact, in the part of Spotify’s influence in the music industry, he has thoughts that do not fully coincide with the opinions of experts.
“The only thing that worries me about what he’s doing is Game Pass. Game Pass scares me because there’s a service called Spotify that was created for the music industry and has almost the same logic. Spotify has destroyed the music industry, literally halving the music industry’s annual revenues. So much so that people don’t buy songs anymore. People don’t buy songs on the iPhone, for example, so why should they? After all, they are all included in the subscription service. Even Apple has announced that it is considering removing the ability to buy songs because no one is buying songs.”
“We have to be careful not to create the same system in the gaming industry. These markets are much more fragile than people think. I’ve seen the gaming industry destroy itself in the early 80s, I’ve seen the educational software industry destroy itself in the mid-90s… they have officially destroyed billion-dollar markets within a few years.”
“That’s why Game Pass worries me. I love it as a customer. I also love Spotify as a customer. There’s every song I want. This is a great deal for a customer. But I wouldn’t say it’s that good for the industry.”
Of course, Fries has a point that he jumps on here. Game Pass has about 25 million users, while Spotify has over 180 million users. While the share of subscription services in annual gaming revenues is 4%, this amount is around 65% in the music sector.
Tim Ingham, music industry reporter for Music Business Worldwide, disagrees. “It wasn’t Spotify that cut the music industry in half, it was piracy. “Spotify offered music lovers a more comfortable, legal, and monetizable alternative.” The same can be said for Game Pass. Being able to play such a large number of games for an extremely small amount is a factor that reduces the use of piracy in low-income areas.
