Microsoft is aiming to get its Game Pass streaming service available on every screen and hardware platform out there, which includes both Sony's and Nintendo's game consoles.
As GameSpot reports, the desire to feature Game Pass on rival game consoles was voiced during the 2023 Wells Fargo TMT Summit this week in California by Xbox chief financial officer Tim Stuart.
Stuart was asked a series of questions by Michael Turrin, managing director, Software Equity Research Analyst at Wells Fargo Securities, regarding the acquisition of Activision Blizzard. In particular he asked Stuart about margins and how to protect and sustain them.
In response (full transcript available at Seeking Alpha), Stuart said, "Our mission is to bring our first-party experiences, our subscription services to every screen that can take a -- they can play a game. That means smart TVs, that means mobile devices. That means what we would have thought as competitors in the past like PlayStation and Nintendo."
Stuart explained that Activision has now changed from a "lower-margin third-party entities that we sold on our store to a high-margin first-party business." He gives the example of Call of Duty now being high-margin sales for Microsoft on PlayStation and Nintendo, and World of Warcraft being a high-margin business due to its subscription model.
Microsoft clearly views Game Pass as a high-margin business, but Stuart also mentions advertising as forming part of the Xbox strategy. It therefore makes sense that Microsoft wants Game Pass (and ads) available on tens of millions of Sony and Nintendo consoles, but I suspect neither company is going to allow the service to exist on their platform.
