Take-Two Interactive Head Expresses Xbox Game Pass “Makes No Sense” As A Business Model For The Industry

Engaging in the conversation around Xbox Game Pass, it is surprising how polarizing the service can be to many. While the subscription comes off to be a good deal for many that pay each month, it is question how profitable it truly is. According to Microsoft Gaming CEO Phil Spencer, Xbox Game Pass has turned a profit despite criticisms.

Even more, the service is recorded to have generated nearly $3 billion in revenue from console users alone from 2021. A report from TweakTown reveals that $2.9 billion was gathered in gross revenue that year. Additionally, Ampere Analysis also shares Xbox Game Pass is the most popular subscription in the industry compared to PlayStation Plus, Apple Arcade, and more in North America.

In a new statement from Strauss Zelnick, Take-Two Interactive CEO, he expresses that the service truly does not make much sense in the grand scheme of things for the video game industry, GameSpot transcribes from the firm’s latest earnings call

The interactive entertainment business is very different than the linear entertainment business. People consume far fewer hours of interactive entertainment in a given month than they do of linear entertainment. And within that consumption, there are far fewer titles consumed in interactive entertainment than there are with linear entertainment. So I, at least, pose the question as to whether subscription makes as much sense for interactive entertainment as it does for linear entertainment and registered some skepticism, which I still hold.

I don’t think that ever made sense. I still don’t think it makes sense. And I believe that it’s now becoming obvious that it doesn’t make sense. It’s just a lost opportunity for the publisher. There probably is a subscription business. It’s a catalog business. It’s probably best aimed at very avid consumers because those are the consumers who are interested in playing catalog titles, and playing a whole bunch of different titles in a given month.

He adds, “But I don’t think it’s a mass market service that supplants the interactive entertainment business as we know it at all. And I don’t think there’s any evidence to the contrary so far.” While showing success so far with more than 25 million users recorded, Zelnick concludes that the service is not a widespread answer for long-term success.

However, Zelnick is not completely opposed to Microsoft when it comes to video games. In fact, he is in favor of the current acquisition plans underway from the Xbox firm to purchase the Activision for $70 billion. He acknowledges that PlayStation is truly the only force against the purchase being processed . You can read the full report by heading here.

Are you for or against Zelnick’s statement?