Big question will gamepass work, they're clearly not making money on it atm and have put close to 10 billion adding ip content, trying to emulate the netflix model which I just don't believe will work with video games.

Gamepass poses no threat to Sony at the moment, and i dont think it will do in the long run.

Why?
Because it's an experimental businnes model in the gaming area, to really work it needs several hundred of millions of active subscriptions. Why an AAA publisher would want to get a small revenue share from its titles while can sell them for $70-$80 each?

Also, videogames are something very different from films and tv series, they need time to be completed.
Netflix can safely remove any film without damaging the costumers; films are tipically just 1h to 3h long, experienced in a single shot.
A videogame is a different experience, it may last for hundered of hours... what if a game you are playing is removed from the Gamepass without any notice?

Games leaving Gamepass don't also leave the Xbox Marketplace, they are still available to buy digital (and in many cases physical). Savegames are also compatible between physical, digital and subscription versions... since they are all the same for the system.

So where is the damage for the customer who played the game on GamePass from day one and buys it after the GamePass removal for $10 - $30 compared to the customer who bought it day one for $50 - $70?

It still remains to be seen whether it will work with Netflix. They started making money but are now in debt investing in original content to keep their subscribers while the market fragments. Netflix had 12.4 billion debt at the end of 2019 with a net income of 1.86 billion. Their shares are falling with the loss of subscribers.

At some point we'll probably see advertising on streaming services, which you can't ffwd or skip. Pausing the match for the next 15 second commercial. But maybe you can get a premium subscription without commercials. Not sure how that would work when the game is on hold for the other plebs to watch the commercial. Same as my cable provider, you can stream for free with commercials (and locked vcr controls), or pay extra to stream without.

I think the bigger question is what danger gamepads poses to gaming:

1) the big service similar to gamepass are running at a loss. Losses in billions from Disney+, Netflix, Amazon etc
2) big games cost big money which means bigger losses
3) pushing out competition or forcing Sony to go down the same road will mean loss in quality big productions across the board.

It's happened with microtransactions becoming a norm and now this will be next. We will be paying £240 or more a year for games we will never own, we won't get big games like Cyberpunk, Gears, Halo, God of War anymore as they will all them be cheaper games asking for season passes and microtransactions for different costumes, loot etc.

The big companies can afford to take a long term loss as they have been doing, but eventually with these things, someone pays for it somewhere at some point.

I rather MS do the gamepass right. No day one AAA games so they can recoup game costs or a chunk of it and then release these bigger games at 6, 9 or 12 months depending on success.

I've lived long enough to see time and time again that celebrating crap deals that are too good to be true, only lead to big losses sooner port later and I love my big triple AAA experiences too much to risk them for a short term cheap gain.

Not to avoid the question at hand I think Sony will take a wait and see approach, and if they need too they will release a lighter version of gamepass that will have psnow included in it but not day one for the big games, or an expensive version for discounted day one or free day one.

Unlike Netflix Game Pass makes indirect revenue from increased DLC purchases. Also Game Pass doesn’t function by itself like Netflix. People who buy outright on console as well as Windows Store and especially Steam provide the short term sales revenue.

The ecosystem helps each other out. Therefore budgets don’t have to change.

1. I could be mistaken but I believe Netflix profited almost two billion last year? Netflix isn’t the best comparison if you’re predicting bad things for gaming, because the service not only makes money but it produces massive, expensive content. I’m sure Disney+ and GamePass lose a lot of money, that’s how new services and businesses work, especially these kinds. You have to buy all this content and you have to offer it dirt cheap to get people interested. It’s a long game.

2. Big games do cost more money which could lead to bigger losses but they also make more money. Sony said this gen something like 7 out of every 10 of their games aren’t profitable. But those 3 that are, make huge profits and offset the rest. You can invest more money into a huge project that you think you’ll see a return on. For example, Disney spent over 350,000,000 to make the last Avengers movie. They’re ok with that, because they know it will profit billions. But does that mean they’ll also spend that amount making Spider-Man or Ant Man or Doctor Strange? No, that wouldn’t make sense. Games are the same. Sony wouldn’t spend the same amount of time and money on Sackboy as they did LoU2. Also, a stark difference here with original content for video services, is GamePass games are available day one outside of the service. So why would MS invest less into a Halo or Gears or Avowed because of GamePass, when they’ll also be charging $60-70 for them outside of GamePass? They can still get that retail revenue, AND GamePass.

3. I don’t see why a GamePass service would lead to less big game projects. Many of the most expensive television series of all time are on subscription services. Even the movies are starting to catch up on blockbuster Hollywood numbers. IIRC Netflix has three 200,000,000+ projects in the works and Amazon has the Lord of the Rings, which is more of a series but will supposedly cross the billion dollar mark. It also hasn’t affected quality... in fact I would argue subscription services have past broadcast television years ago. Every now and again you get something like a Breaking Bad but for the most part network television and basic cable blows. And even Breaking Bad was a cable network.

I just don’t see the logic that GamePass will lead to worse games. You don’t get people subscribed to a service with weak content. Value doesn’t matter if what you’re getting isn’t valuable.

1. Netflix is actually over 12 billion in debt to pay for that expensive exclusive content. They are currently losing subscribers and stock prices are declining.

3. If everyone says it's great value and saves them money -> less money goes into game budgets. It's simple logic. Fargo on cable is very good! I haven't seen a good show on Netflix in a while, would love recommendations!

Imo, TV quality has declined, I'm watching less and less as the years go on. It doesn't help that what I'm interested in is spread over different streaming services thus I can't watch it. It's nice when you live alone and can switch services on the fly to binge watch what they have to offer, doesn't work like that in a family setting.

And that debt will get higher and that's fine, Netflix has been trending in the right direction for a few years now. It's just how they do business. IIRC Disney is also in a lot of debt.

You can buy all of these games outside of the service. It's not as if GamePass is the only way to experience them. Most Xbox owners and PC users still don't use the service. A monthly service fee and enticing users to buy DLC and the games themselves on sale can also recoup much of what you'd otherwise lose thanks to the used game market. MS is also not Netflix and not in any debt.

Your concerns are not unique but I just don't understand them. For these fears to come true MS would need to start limiting their software to GamePass or, at best, delay the release outside of GamePass for like a year after it hits the service. Then they'll have to find a way to get people to stay subscribed to the service while they apparently release small scale filler because they are cutting all the budgets. Also you mention Netflix and debt and admit they are paying for expensive content... why isn't Netflix cheaping out? Because they know that no one will want to buy cheap content. There is Hulu for that.