Advertisements in subscription services are nothing new. Netflix, Amazon, and every other company out there has some sort of ad-supported tier, which is often way cheaper or even entirely free depending on the service and how aggressive the ads are. However, gaming is a different beast, and we companies haven’t found ways to implement them outside the mobile space, where they remain on a quid-pro-quo basis anyway.
But that is slowly changing with the prevalence of subscriptions, and Xbox Cloud Gaming has just received an ad-based free edition players can hop onto without paying a single dime. Xbox Cloud Gaming has long been in decline and probably quite expensive for Microsoft to run and sustain, which led to time limits implemented across every Game Pass tier. With ads, things could turn the tide on Microsoft’s cloud gaming service and, according to Xbox general manager Jonathan Stringfield, potentially avert inevitable price hikes throughout the industry.
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Stringfield predicts that, in the coming years, the games industry will inevitably be faced with rising costs and sustainability issues, which will then produce “dramatic” results whereby the costs will be offloaded to the end-user.
“Either of two things need to happen if we want to stick with the model as it exists today: We either need to dramatically increase the price of games, which I don’t think would be terribly popular with folks, or we need to find other mechanisms to allow access,” Stringfield said to Games Beat. One of these “other mechanisms” is, of course, ads.
“When we talk about advertising—and things that are adjacent to it that amount to recurrent revenue, whether it’s subscriptions or otherwise—what this allows for is an alternative,” he explained.
Stringfield prefaced these comments by saying advertising definitely cannot work in every game and probably not even every console or platform, and it isn’t necessarily going to be hammered into everything under the sun. However, they are to be viewed as a potential way to offset costs without extracting more money out of the end-user via higher prices. The very existence of premium platforms, and quite popular ones at that, whose sole stated purpose is to delete ads, does run counter to this somewhat.
People are very obviously willing to pay not to see ads or be interrupted during their viewing or gaming, so it remains to be seen if or how advertisements can be used in gaming broadly, outside of the limited scope of ad-based subscription services. Maybe we will all end up on the cloud eventually (Sam Altman does seem keen on the idea) and thus be forced to watch ads and, like Sony’s patent says, even be made to stand up and scream the product’s name on the screen to be given the ability to continue.
Grim ideas, and I hope they never come true.
