As a kid, I loved games. 

I played so much, that my parents enforced a rule that I was only allowed to play on Friday nights and weekends (which in hindsight was an incredible thing they did). 

A fond memory of mine was when I was 7 years old, at home recovering from a surgery. At the time, I had inherited a PlayStation 1 from my Uncle who had upgraded to the Xbox. I had to take a week off school so I had time to kill. I still vividly remember half lying on the couch in my pyjamas when my dad came home with a copy of the new Rugby League game.

With my mighty Bulldogs on the cover

I disappointedly had to point out that this game wouldn’t work with my PlayStation 1. Then he said “Well lucky you have this”, before then pulling out a new PlayStation 2 slim. 

From there, I upgraded to an Xbox 360 which was my primary console through high school.

Since then, the only thing I own and play occasionally is a Nintendo Switch. 

It’s probably been a good 6 years since I played a game properly and fully. I have been somewhat disconnected from it. I had a longing to go back, but it seems like the industry that I adored as a kid has changed. 

Recently, Xbox’s CEO Asha shared that they’re resetting, which also meant the letting go of 1,600 people and the return of independent studios.

One thing that caught my eye was that the primary reason behind this was due to the poor performance of the Game Pass. 

Our business today is not healthy. We are operating at margins that are 3-10x lower than comparable platform and publishing businesses. We entered Gen 9 with a smaller install base and a higher cost structure. To grow, we bet on Game Pass, multi-platform, and a broader portfolio of content. While those businesses have created meaningful value, they did not grow at the pace we expected. As that happened, our core business weakened, and we added more teams, more investment, and more time, hoping for a better outcome. And now the industry is facing the most severe hardware crisis in its history. We must reset XBOX.

Asha Sharma - Xbox CEO

For those unfamiliar, Game Pass was Xbox’s subscription service, where you could get a library of games to pick from, all from a small flat fee every month. This also worked across platform, so if you had an Xbox one or PC you could play on both.

In this article, I want to breakdown why Game Pass didn’t work for Xbox and what happens when you have a misalignment between your product, market and business model. 

How I used to buy games

Teenage Liam’s favourite time of year was late October to November. This was the time when major studios released their games (which is still the case, as GTA 6 will release around that time this year).

It was common that most games stores, both in Australia and overseas, would do midnight launches. You could camp out the store until Midnight, and as soon as the clock struck 12, you could go in and buy a copy of the game.

There was always so much hype.

You’d go into the store and buy a physical copy of the game. A disc with the artwork. Over the years, you’d have a collection of games. Sometimes you’d borrow a game you didn’t have off a friend (like when my mum caught 10 year old me with my friends copy of Saints Row 2). 

Depending on the game, you’d have 2 modes to play:

  1. The campaign, which was an offline playable story mode

  2. Multiplayer

Multiplayer is where gaming came to life. 

This is where you would connect with other players around the world and compete against each other. You’d create a party with your friends and find other teams where you’d usually exchange pleasant greetings and share in detail the lovely time you’d spend with their family members (mothers, specifically). 

IYKYK 💀

The game that, I believe, had this perfect was Call of Duty Modern Warfare 2. It had a gripping campaign that had you deeply immersed with missions (including an extremely controversial one that Infinity Ward took a risk on) and phenomenal online play. So much so, that even when subsequent Call of Duty’s came out each year after, players refused to move and stay with MW2. To this day, people still talk and reminisce about the game. It’s no wonder it was the highest selling game of 2009. 

For me, this was the game where I sunk the most time. It came out when I was in Year 6 and was the dominant online game for me and my friends all the way to Year 9.

My no-video-games-on-a-school-night rule still applied in high school. At the end of every Friday, I would make an agreement with my friends for when I would see them again online, and rush back home to fire it up.

One little nuance with the Xbox 360 was that in order to play online, you had to pay for Xbox live. You could buy this as either a monthly or yearly gift card in the shops or whack in a credit card on the Xbox store.

For me, I was always happy to pay this price. I have endless memories with friends and we still, to this day, fondly speak about the times we had playing.

I obviously thought nothing of it at the time, but me paying for Xbox live was my first taste of ‘subscriptions’ in gaming.

The money glitch

$45.18 billion.

The first person who can DM me on LinkedIn what this number is, I’ll send you $20 AUD (the answer is below).