Thread by @ZhugeEX

Here is the most important part of the Xbox Series X|S launch PR:

"70% of Series X|S consoles are attached to new and existing Xbox Game Pass members"

This is Microsoft's goal with Series X|S, to drive Game Pass subscriptions and generate recurring revenue.

Quick thread 1/

https://twitter.com/Xbox/status/1327280675934748673

2/ Gaming subscriptions are driving growth on top of traditional spend, not just on Xbox, but on all console platforms. Increases LTV of a console owner.

With PlayStation, over 50% of PS4 owners had signed up to or already had a PS+ subscription in the first few months.

3/ PlayStation has been able to maintain this over 7 years, with 43% of the 107m active PS4 users having a PS+ subscription today.

Nintendo has been able to do the same, releasing Nintendo Online in 2018, which now has ~40% of Switch owners subscribed to the service.

4/ While PlayStation and Nintendo offer online play, a few free games and other perks each month, Xbox is going one step further and including all of the above + a larger library of titles + its own first party titles to increase the value of the service.

It's a $180 a year sub

5/ Here's are the facts

The average console gamers buys two games per year

That's spend of around $120 a year

Right now, the average PS4 owner has 13 games in their library. @$60 Let's say $780 spent

The average Switch owner has 7 games in their library. Let's say $420 spent

6/ Game Pass gives players access to a wider range of games, but it doesn't stop them spending on other games

According to Xbox, Game Pass subscribers generate 20% more in sales from buying non Game Pass games and DLC than non Game Pass subscribers do

bloomberg.com/news/articles/…

7/ Game Pass subscribers absolutely get value from first party games and other AAA / back catalog titles in the service, but that doesn't stop them spending on:

- The latest COD / FIFA / AAA release (not in Game Pass)
- Sequels / prequels to games they discover via Game Pass

8/ Taking all of this data into account.

Game Pass subscribers are still likely to spend that $120 each year on new games, perhaps 20% more than usual = $144.

They're spending $180 a year on Game Pass.

Over a 6 year period that's $864 on games and $1,080 on Game Pass.

9/ The lifetime value of that console player increases significantly

That's why Xbox is looking to scale + grow Game Pass across multiple platforms

That's why All Access comes bundled with Game Pass

That's why Game Pass includes Live Gold

That's why 70% attach is notable

10/ Console still plays an important role for Xbox and the above thread should explain why.

But I've also written a thread in the past about why, at least in the short term, console is where MS gets the highest returns.

https://twitter.com/ZhugeEX/status/1293655805468856320

Just a quick footnote, because I didn't clarify properly.

The above numbers don't account for spend on DLC and add on content. That is a sizeable portion of the market these days.

Game Pass subscribers would also purchase add on content on games in the service. See tweet 6/