Bringing WoW to Game Pass

This both is, and is not a typical development post. On the one hand I'm not talking about any code, pattern or infrastructure. On the other hand, I this all comes down to a discussion about why companies write code.

I don't know what Microsoft plans to do with WoW or any other IP it got in the Activision/Blizzard acquisition, but there has been a lot of discussion around whether or not games like WoW will ever make it to Game Pass.

My thought is simple; it depends what Microsoft's objective is.

A lot of the doubters are pointing out that some WoW subscribers are also game pass owners who would no longer need a WoW subscription or that the price would be lower since WoW is only on PC and a PC only pass would be much cheaper. On the flipside, a lot of people thinking it possible focus on numbers; maybe the influx will out-weight the losses.

The fundament flaw here is an assumption; that the only motivating factor in this decision would be the direct revenue from WoW alone.

I'm certain that will play some factor in the decision process, but I'm skeptical that it is the only or even the primary consideration. First, Microsoft has options. 

For instance, they could lock the subscription part of the service behind the "Ultimate" tier which could (as others have pointed out) reduce the gap.

And honestly, that seems plausible. More because it hedges their bets than anything though. I suspect Microsoft wants to bring as many 1st party titles to game pass as it can. Why? A few reasons:

• Attractiveness
• Retention
• 1st Party Content Saturation
• "Add-On" Sales

Game Pass is successful. However, it could still become MORE successful. I don't currently subscribe to either Game Pass or WoW. I have done both at times in the past though. And the broader the catalog of titles in Game Pass grows, the more likely I am to go back. Contrasting that, I'm never going back to a WoW sub for the sake of WoW despite the fact that I might play it some more if it were on Game Pass.

As you can see, more games makes it more likely that more people will sign up. And, I wouldn't be surprised to find a lot of people in a similar boat as I am where a title like WoW could actually increase my odds of signing up, even though I would never buy another WoW subscription. In short, it makes the service more attractive and could drive up revenue they would not have otherwise gotten.

The next point is very similar; retention. WoW can go a while between major content updates and Game Pass can have hit or miss quality in terms of titles available. Having a large library of 1st party games which are also well known and/or high quality boosts the odds of people holding onto a subscription longer. And that, again, is more money.

Retention is a thing which I don't think that a lot of people actually understand. Both of these subscriptions have millions of users. Bumping up retention even just a few percent month over month can quickly balance out any other losses. 

Content saturation is another point. Why do Netflix and Prime, etc... make their own content? They don't need to pay ongoing licensing fees and can reduce their catalogs dependence on 3rd parties. Another way that Microsoft makes profit off of bringing games like D4 and WoW into the fold is that it opens up the opportunity to reduce the number games studios they paying out too. Again, we may be talking millions a month in extra revenue simply because they wouldn't need to pay for as many titles to pad the subscription out. 

And lastly is anything else which they sell as a result. A number of people who perhaps bought Game Pass for WoW will now buy an XBox instead of or in addition to a PS5 when they may not have otherwise. Each investment down this path increases the odds they stay subscribed for longer and longer and buy increasingly more into the ecosystem.

The only problem with these revenue streams is that they are not direct or easily measurable. If retention spikes, can they PROVE it was WoW that made it happen? Probably not. 

I would say that Microsoft has shown themselves to be very progressive in their revenue models. And, as such I wouldn't be surprised to see them bring WoW to game pass. The number of ex-WoW players is MUCH larger than the base of current WoW players. And a lot of those would consider themselves gamers and would likely sign up for a month of Game Pass to peruse the catalog and get a little nostalgic. Some might even buy some cosmetic items. 

As you can see, the question is a lot more complex than whether or not Game Pass is cheaper than a WoW sub. Similar questions are raised around how to monetize any piece of software. Many companies will offer software for free to developers in the hopes that they then build software which needs a license. Or they give the software away free and charge for support. Definitely not a play for direct cash, but one which works out nonetheless for some companies. 

Subscriptions like Game Pass or Netflix which also cross license other companies IPs are a LOT more complex and have a lot of room to get inventive. Focusing on the raw numbers is deceptive. Everyone wants to get paid for their work. It just happens that sometimes the best way is to charge less, spread the charges out or even find ways to hide the true cost.

To make my point, I'm going to circle back to WoW. As per this article, estimates are that WoW has about 2M subscribers and this pegs Game Pass at 34M. In short, WoW's total user base is likely somewhere around 6% of Game Pass. If adding WoW to the catalog allows them to remove enough 3rd party titles to hold onto, say, and additional 10% of their Game Pass revenue. Well, then they can break even while LOSING 2M subscriptions without adding a single new one. 

Scale matters. Microsoft is big. Bigger than WoW. There are a lot of ways to absorb the loss of WoW subscriptions and still turn a profit. The reality will likely be a mix of things. Reducing 3rd party offerings in the Game Pass catalog is likely a part of it. I also expect Game Pass subscriptions to increase as well as a result. And perhaps they will lock some amount of content behind Ultimate to further increase profits. The fact is, WoW subscriptions are overpriced giving MS a lot of room to increase attractiveness of not only Game Pass, but also WoW and easily turn a profit.