It's been a good while now since I last posted about how, for the average consumer, Game Pass is simply not as cost-effective as just buying the games you're actually interested in. My conclusion, based entirely on the numbers, was that most consumers would be better-served by just buying what they want.
Well, E3 has happened since then, and Microsoft and Bethesda showed off all the games that will be "coming day one" to game pass... eventually. Naturally, this has caused a lot of people to lose their minds.
Paul Tassi's take, over at Forbes, is pretty typical:
No normal consumer is going to want to do this.
The attach rate of the PS4, which was unusually high, was still only 8.76 -- that means that most people who bought the PS4 bought a total of maybe 9 games, over 8 years. The XBox One's attach rate was about 6.55. Only the heaviest of heavy users are buying 12 games over 3 years, which would equate to an attach rate of 32, a number which no video game console has ever achieved.
The all-time attach rate champion, BTW? That's the Sega Master System, which had an attach rate of 20.9. The mean average attach rate of all consoles, including statistical outliers like the Sega Master System and Sega Genesis, is 7.04. The median average, i.e. the value in the middle of the pack, is 7.19; this is a normal number of games to buy for an average game console. 32 games is literally more than four standard deviations above the mean, or higher than 99.7% of all video game consumers in history.
Not only will neither new-gen console manage an attach rate of 32, I feel quite confident predicting that neither console will even manage an attach rate of 10 (something which Sony has only managed with the Vita; none of PlayStations have hit a mark that high). Tassi's bedrock assumption is dead wrong; and if your initial premise is wrong, than anything you conclude based on that premise will also be wrong.
Tassi goes on to do some napkin math, concluding that Game Pass costs $360 (or, $30 per game), versus the PS5's $840 (or, $70 per game), but the actual math works out very differently.
Here's the actual math.
Both the XBox Series X and PlayStation 5 consoles retail for $499 USD (MSRP*). If we assume that the XBSX has an attach rate of 7.5 (the median average value for all consoles from the NES forwards), then the total cost of ownership, including the games at $70 a throw, is $1025 USD, or $128.12 per year over eight years, the expected length of a console generation. Excluding the cost of the console, the cost of the games alone averages to $65.62 per year.
Game Pass, on the other hand, costs $119.99 USD per year, which is already nearly double the cost of just buying the games you care about. Factor the cost of your console, and the total cost of subscribing is $182.38 per year for 8 years -- hundreds of dollars more than if you'd purchased what you wanted outright.
And Game Pass only includes Microsoft's games; it won't
include EA's, or Activision's, or any other third party studios', lineups. Elden Ring, for instance, will probably not be a day-and-date Game Pass release.
This math doesn't "snowball," rapidly or otherwise, in Game Pass's favour. It's going to stay exactly the same, for the foreseeable future, since the number of games that average game consumer buys stays pretty much the same from one console generation to the next. The reason for this is simple: people only have so much time to play games, and can only reasonably fit so many games into that available time.
This is why so many people play every Call of Duty... and only Call of Duty. Or this year's FIFA, or Battlefield, or the latest season pass of Fortnite, or League of Legends, or Warframe, or any of a hundred other highly-popular "live service" titles. These people are not outliers, they are increasingly the norm for the industry, which is why publishers like Ubisoft are so desperate to cater to them.
Yes, exceptions exist; people who review video games, for example, or who stream video games, will probably play more than enough different games over time, and revisit older games infrequently enough, to justify the cost of something like Game Pass. But they're the only ones; most of us should be saving our money for other things.
So, should you be buying into Game Pass?
Take out a piece of paper and a pen, and do the following exercise.
From memory, and without any assistance at all, write down the titles of every game from any single console generation that you would definitely play, if you had the money to buy them, and the time to play them all.
- DO NOT use any wish lists, or best-of lists, or E3 round up lists, or any other cheat sheets. DO NOT ask friends for help, or scroll through any social media feed while you do this. These are just the games you can recall on your own, from memory.
- The span of time covered by the release dates of the games on your list must all fall inside an 8-year window; i.e. your list can either include games from the last console generation, or it can include games from recent E3 announcements (i.e. the upcoming generation), but not both. Eliminate any games that fall outside your release date range.
Once you have your list, check for duplicates, and cross off any that you find. This includes multiple instances of annually-released franchises; you can count Call of Duty, but only once.
For every "live service" title (e.g. DOTA2, League of Legends, Fortnite, FIFA, Valorant, Warframe, Path of Exile, etc.), cross off two other titles. These games are time sinks by design; every one of them you play will consume enough of your time to count as, effectively, three games. I say that as someone who plays Path of Exile, and knows whereof he speaks.
Now, check your list again. Do you still have fifteen or twenty games on your list? If so, then Game Pass is probably for you. If not, then Game Pass is probably not for you.
The current year exception case.
Or, MSRP means very little, these days.
The cost of ownership calculations above include the US dollar MSRP for both consoles (the PS5 and the XBox Series X). There's an implicit assumption going on here, which some of you may already have spotted: as of this post, the new generation of game consoles are almost impossible to buy at those prices.
Scalper prices can be as much as two or three times MSRP, and that's assuming that you can even find a scalper who has a console to sell. If you're hoping to pick one up from Amazon, or Best Buy? Well... good luck with that.
For the two calculations above, this doesn't matter much, since the same console cost is added to both sides of the comparison; raising that cost just raises it for both cases. It does narrow the percentage gap between them, but even if you pay $1200 USD for a console, the game pass scenario still costs 25% more than just buying everything.
But this is where Game Pass Ultimate enters the picture.
Game Pass Ultimate includes additional features which standard Game Pass does not. Most notably, it includes Cloud Gaming. Microsoft's Cloud Gaming servers are currently XBox One X's, but MSFT is in the process of upgrading those to XBox Series X's; once that's done, your Ultimate Game Pass will allow you to stream next-gen games to basically any potato of a device with an internet connection, this eliminating the cost of the game console entirely from the equation.
And, with current scalper prices being what they are, this does start to work in the consumer's favour:
Yes, in a world where a next-gen gaming console can cost you $1200 from a scalper, rather than its MSRP of $500, the cloud gaming option will cost you only 80% of the straight purchase model.
Caveats abound, however. First, this scenario only works in a market where consoles cost $1200. If consoles start re-selling for only $900, this advantage disappears... and if consoles drop close to MSRP again, the scenario reverts back to the being a bad deal for most consumers.
And make no mistake: console prices, much like all the other pandemic-inflated prices, will return to earth. The only question is, when? If you can wait another year, then the economics of this probably don't make any sense for you... and Microsoft doesn't even have Series X server blades online yet, to play the next-gen games they just announced for (mostly) 2022 and 2023 releases.
In other words, subscribing to Game Pass Ultimate won't net you any next-gen benefits until after prices have normalized, at which point the cloud gaming option stops making financial sense anyway.
And that's before we even start talking about the performance of cloud gaming, which is inferior to the performance of a system you have physical access to; and the cost of the bandwidth needed to stream games from Microsoft's servers to your home, which are not factored into the expense of this yet.
Long story short; even the cloud gaming scenario doesn't work in consumers' favour, outside of the bizarre market conditions we're suffering through this year, and (hopefully) only this year... and the lack of next-gen hardware and games on the server side that you'll be seeing for the rest of this year, at least, essentially negate even that advantage.
Other caveats: all of my "napkin math" assumes that consumers are buying nothing but full-priced, AAA new releases at $70 USD a throw. If you can wait just a little while, you can buy games on sale, which will reduce the cost of console ownership even further... and makes Game Pass's value proposition even worse. The break-even point, incidentally, is about 13.6 games on average over the lifespan of your console, which is 1.62 standard deviations above the mean, or more than 94.74% of consumers.
Game Pass is not a money-saving service.
This doesn't mean that the service is inherently bad, or that you shouldn't subscribe to it. It just means that you shouldn't subscribe to Game Pass because you're hoping to save money by doing so. The math doesn't lie; 95% of consumers will spend more money, not less, by subscribing to Game Pass.
What Game Pass does provide is convenience. It's undeniably convenient to have ready access to Zenimax's entire back catalogue, and to be able to stream almost all of those games with zero waiting time because of XCloud; is that worth paying an extra $45 a month which you wouldn't have spent otherwise? If you think it is, and you have the money going spare, then go for it. It's your money, and $45 isn't even that bad, as frivolous spending goes.
Just stop insisting that the rest of us have anything to gain by subsidizing the service for your benefit.
UPDATED 06/23/2021:
I've had to tweak some of the math; it turns out that I was over-estimating the historical attach rate of video game consoles.
The numbers that I linked to include both the NES Classic Edition and SNES Classic Edition systems, and lists attach rates of 30 and 21 for them, respectively. This is not correct; the actual attach rate for both of Nintendo's Classic Edition consoles is actually zero.
This is because both CE consoles come bundled with all the games that are available for them; so, while they do come with either 30 or 21 games, depending on the model, nobody who bought either system ever bought so much as one additional game to play on it. That's the definition of attach rate: the average number of secondary purchases that follow after a primary purchase, the console being the primary purchase.
Since including the Classic Edition consoles skews the numbers, I have excluded them from the data set. The alternative was to count them both as zeroes, which would have brought the average down even further, but that didn't feel right, either. This dropped the mean average attach rate from 8.12 to 7.04, and dropped the median average from 7.50 to 7.19.
This also threw off my standard deviation calculations; originally I'd pegged Game Pass as being poor value for 84% of consumers, but the actual number is over 94%, which is a Z-score of 1.62. This is right in line with my opinion of last August; I'd written that I'd be gobsmacked if the percentage of consumers for whom Game Pass makes economic sense was even a double-digit figure, so the actual value of 5.26% is right in line with that guesstimate.