The well-known Wedbush Securities analyst Michael Pachter made an appearance on Yahoo Finance Live last week to discuss all things Activision Blizzard, and he made some interesting predictions about what to expect from the deal.
Perhaps most notably, Pachter claimed that Xbox Game Pass will jump from 25 million subscribers to 100 million subscribers in the future, driven by the acquisition and the focus on Xbox Cloud Gaming. Here's what he had to say:
"...they bought Bethesda, which is a giant studio, and now they're buying Activision. When they're done, they are the fourth major game publisher in the US. So they're going to be giant, and they're going to be in a position to actually support their subscription.
Their future vision is, let's eliminate the console. Let's use the cloud, and let's deliver games to any screen that you have. And that potential market is 3 and 1/2 billion people. So I don't think they'll get that many subscribers, but will they go from 25 million to 100 million? Yes."
Pachter also suggested during the discussion that believes there's a good chance the Activision Blizzard deal could be finalised by the end of the year, depending on whether the FTC decides to try and challenge the deal.
Some positive thoughts from Pachter, then, and here's hoping they come to fruition! Game Pass will surely continue to grow in substantial numbers moving forward, and the Activision Blizzard deal should provide a very welcome boost.
Do you agree with Pachter's comments here? Let us know down below.
[source uk.finance.yahoo.com]
Comments 35
"Their future vision is, let's eliminate the console."
That right there is a scary thought, I think that will be the day I give up gaming or just stick with nintnedo.
Hopefully im in my 50's/60's by the time that happens
I only sign up for gamepass when a game comes out that interest me that isnt on nintendo or playstation. Even then i get gamepass for free with reward points. Dont know how they will reach 100 mil especially on a consistent basis
Sounds about right…Pachter stating the obvious…although now that he’s saying it I expect an upcoming news story about gamepass is being killed off because it’s losing too much money.
Bold prediction. Not sure I agree, at least in the near future. The reality is that while there are an estimated 2 - 3.5 billion people who play games in the world console gaming only accounts for about 200-250 million. This number has barely changed. Expecting around half that to subscribe to your service is wishful thinking especially with console like games. Most of those 2-3.5 billion seem to gravitate towards simpler mobile like experiences.
Of course Game Pass can break free of the console itself because of the cloud but it still seems a long way away.
@UltimateOtaku91 I don't necessarily think the future vision is eliminating the console any time soon, but it does give the OPTION of playing without a console for the vast majority who don't care about the highest fidelity etc.
I think we will continue to see consoles for at least a few more generations (they've been talking about the death of consoles for 2-3 generations already, hasn't happened) and if we get to a point where we REALLY don't need one then that is good for the consumer. We're nowhere near that though.
@UltimateOtaku91 They’ve been pretty clear since the dawn of gamepass that this is the plan. If they could get gamepass on Nintendo and PlayStation they would…they can’t, so Xbox console has to exist for now. But once they have gamepass as an app on every tv, have it on every console, have it everywhere Netflix is today…I’d be very surprised if there’s still a dedicated console. I do look forward to seeing where the Xbox fanboys migrate to though…Sony or Nintendo…if one of them is not a 3rd party publisher by that point and the new console on the block is a Tencent one
Anyway, what did you think ‘Netflix of games’ meant?
Remember when pachter predicted the pc and console market would die due to mobile gaming, the ps4 would lose to the Xone but both would sell poorly and the switch would flop due to its gimmick?
Ps4 is the 2nd best selling home console of all time and 3rd best selling gaming device. Switch is the 3rd best selling home console and 4th best selling gaming device.
EDIT: don’t take pachter seriously.
@CrazyJF While I agree about rising costs, the same will be true of server blades (that run on the same tech) while they need less it will still be a formidable cost.
Though I don't see it jumping like that to over a thousand pounds, console gaming has ALWAYS been a balance of price and performance, it doesn't need to be bleeding edge especially in these days of diminishing returns.
Though a part of me hopes hardware IS limited by cost sooner so we stop concentrating on graphical fidelity so much and more on other aspects of gaming, including getting the most out of the hardware we do have and pushing gameplay forward. We're just too focused on graphics right now and games are becoming prohibitively expensive to make because of it. Too much budget focused on photorealism and not enough on other aspects like innovation, gameplay and writing.
Meanwhile I look at something like Xenoblade Chronicles 3 which is more visually interesting than almost all other open worlds on Xbox or Playstation... perhaps barring Elden Ring. The limited Switch hardware has forced them to be more creative in other areas.
Game pass needs top quality AAA games to get the general public to sign up and more on the day of release. These could be a mixture of exclusives to Xbox or multiplatform as well.
You have to look what is happening in the UK to Netflix and Amazon TV, cost of living going up people are Leaving the subscription services.
However Disney plus subscriptions have increased that is because it’s has Disney, Marvel and Star Wars. My point game pass needs to be at its very best to get more subscriptions.
Netflix = 220.6 million subscribers
HBO Max = 74 million
Disney+ = 87.6 million
Amazon Prime = 200 million
What Patcher is talking about isn't about all the millions of COD players rushing to buy a game pass to play COD. Warzone is F2P. There won't be a jump from 25m to 100m when the deal closes. He's saying that MS finally has the internal studios to create enough content to make Game Pass an attractive subscription service.
And subscription services, when they have enough content, and they are able to stream to any screen in the world, can, on average, get around 100m users.
He's not making a bold prediction, he's stating the end goal of MS' strategy.
This could take years to come to fruition, and there are more complicating matters with streaming an active medium like games rather than a passive one like film/tv and music. But it is currently an untapped market that only MS is in a position to succeed in.
@themightyant "Though a part of me hopes hardware IS limited by cost sooner so we stop concentrating on graphical fidelity so much"
I love every word of this. If we got Xbox Series level fidelity and just stopped there, I'd be happy.
This is why I loved the Switch. It's small, quiet, cool, and portable, but still produces more than passible graphics when a dev knows what they are doing. I'd much rather see all console producers put more effort in to shrinking their consoles down to actual console like machines.
At the very least, I'd love to see a publisher come out and say, "guys, the current model of pushing graphics is hurting the industry overall, and we're just not going to do it anymore."
I appreciate Sony putting peach fuzz on to Aloy's face, but it doesn't make it a better game. A good artstyle, gameplay, and smooth performance will always be what makes the experience.
Edit: Also why I've been praising the Series S more than the X. MS was very brave for releasing a budget, lower end spec console, and it should be applauded.
I can see that happening in the future quite easily. How far into the future, I don't know, but I can see it happening very easily.
There are over 3bn Gamers in the world and whilst I don't think that the A/B deal will suddenly see MS quadruple their Game Pass Subscription figures 'overnight' on the completion, I see NO reason why it won't - as stated here, Game Pass is literally available in many gamers households now.
Netflix has over 200m subscribers and whilst gaming has 'required' hardware in the past, more and more will find the ease, the convenience etc that streaming brought to Music, TV and Film to get their Gaming from too. Gone are the days of having to buy a record/tape/CD player, a VHS/DVD/Bluray player or even a 'satellite' dish/aerial and/or set-top box. They can take their Music, TV, Film library with them virtually anywhere and watch/listen on any device - and I can see Gaming offering the same.
I'm sure 'hardware' based gaming options will still be around for a long time - but I think for the majority of 'modern' games in the future will require you to stream as 'console' hardware won't be capable of running the games well (if at all). 1TB of SSD storage is not cheap - buying 50m+ TB's of SSD to build 50m+ Consoles as well as 50m+ CPU's, GPU's, RAM chips etc etc is money they can invest into the Servers all around the globe.
I prefer 'physical' but the reality is that I expect that like other media, there will be 'cheap' hardware for those who want to buy 'Physical' (like cheap Bluray players etc) and very 'high end' hardware for 'enthusiasts' - so I expect Consoles to exist but more at the 'low' end for nostalgic purposes and the High end PC to be the 'enthusiasts' option but the majority of gamers will be playing via streaming and that is where Game Pass will come in.
@Richnj Completely agree apart from the Switch being passable, it's less the graphics and more the framerate. Playing XC3 was a struggle for the first few hours at 24-30fps but you do get used to it. And few games reach the level of BOTW or Xenoblade.
But it just feels like a hugely disproportionate amount of gaming budget is spent on fidelity and detail much of which is becoming completely unnecessary. Horse testicles shrinking in the cold being the worst example in RDR2 but yes peach fuzz is another, though at least you could see that without being a deviant.
It will be interesting to see where cloud gaming goes as per the article. It has potential but to date I find it a much lesser experience then the local installed version. Game storage requirements continue to grow so it makes cloud gaming more viable. But at the same time they have to resolve latency and offline ability issue without requiring tons of storage. Personally, I think cloud gaming will evolve into a hybrid model. Where co-processing and co-storage is used with regular hardware found on almost all devices.
@BAMozzy @Richnj If they want those sort of numbers they need to broaden their horizons and appeal to the casual crowd, just as Netflix does. That would mean more mobile like experiences on Game Pass. Effectively include the K part of Activision Blizzard King takeover into Game Pass. Candy Crush etc.
As long as the console hardware is selling, I don't think Microsoft would just abandon the console format entirely. Doesn't really serve a purpose, even if GP is available elsewhere. Besides, Microsoft will want to honor digital purchases made in their ecosystem over the years.
But then this is Michael Pachter, who has been making laughably wrong predictions for generations now.
@Richnj I feel like Nintendo Switch wouldn't be nearly so well-supported as it is with exclusives if developers had to waste months of dev time modeling Mario's cheekbone, y'know? Keeping costs down also allows them to publish games outside of the AAA genre mold without bleeding money. I actually would be perfectly happy if, next gen, they didn't push the graphical envelope much further, but just allowed the more powerful hardware to run the games more smoothly, and at higher resolutions.
Microsoft Solitaire on Android already gives you Premium if you're a Game Pass member, crossing over with the PC version - so if they bring that to King games they could convert many of those mobile gamers to Game Pass as they may prefer the sub to microtransactions.
Even just subs for mobile could reach a decent amount given the huge number of players King has.
Then show them cloud gaming / show them the All Access deal where for a bit on top of their Game Pass sub they can get a console for their kid too and win win.
As for hardware, I don't see dedicated consoles going away anytime soon - the cloud will get better and better, but why would MS take away your PC or console anytime soon if you're saving them money?
If you're a Game Pass Ultimate subscriber with a PC or Xbox, you're paying without taking up space on xCloud that can be used for users who haven't got either - I suspect it'll be a long time before that calculation changes
@BBB I'm well aware. There's far more interest in that segment of gaming than in our typical consoles games (regardless of whether AAA or indie). Around 10 times as many total people play them, hence why I think they'd need some of that juice to reach 100 million+ Game Pass subs.
This guy is a total idiot. He thought Nintendo should exit the hardware biz and put all their IP on mobile devices…..
@Richnj excellent post. If I didn’t have so many Xbox One physical games, the Series S would be fine with me. It really is an underrated piece of hardware. Love how it’s portable.
If Call of Duty was exclusive I'd say you'd see the jump instantly. With that not being the case, it'll take a while to get there.
@themightyant With Call of Duty, Elder Scrolls, Fallout, Doom, Halo, Minecraft etc etc - as well as EA Access to Fifa, Madden etc and a range of games from 3rd Parties, they have some of the 'biggest' names in gaming to appeal to a 'wide' audience.
If you can pick up your phone and jump into some of the biggest franchises in gaming history, like subbing to Disney+ for Star Wars, Marvel etc - regardless of whether its a massive budget blockbuster of a film or a small budget TV show, there is something for everyone regardless of whether they are 'casual' or not. In some circles, games like CoD are more 'casual' games - play a few matches with your friends, have a laugh etc.
I'm sure that numerous games would appeal more to the Casual gamers if they had 'cheap and easy' access to them. I used to play 'snake' on my Mobile because it was the 'only' choice unless I bought a Game Boy and bought 'games' for it. Asking a 'casual' gamer to fork out £450 for hardware and £60+ for a game for something they may not play enough to 'justify' that cost compared to having access on their 'phone' for $10 a month is likely to bring those casuals in. They may not have time or dedication to play 'Hardcore RPG time sink' games but there are also a lot of short, easy games to pick up and play too.
Hardcore gamers maybe more concerned with 'visuals' and/or frame rates than Casuals so maybe more inclined to buy 'hardware' to play 'offline' or at 4k/120 instead of 1080/60 but the casuals won't care - they are 'happy' to play for just $10 a month...
@UltimateOtaku91 First, any "analyst" that thinks Xbox plans to get rid of console needs to be taken with a grain of salt. Xbox literally cant stop making consoles given that xbox consoles are what drives streaming servers. Why on earth stop selling them to consumers too?
That said, your faith on Nintendo is highly misplaced on this topic. Nintendo is the only platform holder that is actually greenlighting third party publishers to "port" cloud-only versions of their games and listing them up for sale on the eShop. If anyone obviously would turn their console into a cloud streaming only device first, it seems it would be Nintendo.
@uptownsoul I don’t know why he is so eager to kill off the console. I think he said this is the last generation. I guess it gets him headlines, but the dude is never right.
@Tharsman Nintendo is supposedly investing billions in online services and infrastructure. They have been vague about what this entails. Maybe it makes sense for them to introduce a 5g Switch model if this is the case.
I just want WoW. I know I could get a PC, but Series is more than capable, and FFXIV has shown hotbars aren't an issue.
This guy has been at it since the early '00s at least, and his predictions come true probably 2% of the time. Just another capitalist money guy trying to tip the scales one way or the other w/r/t stock prices, nothing more and nothing less.
@BAMozzy Completely agree, that removing hardware will open it up massively and some will come over but still think they need to diversify to another crowd to reach those heavy numbers.
You say can just jump into COD for a few matches with friends, and that is true to an extent, but only once you know the mechanics and controls which we have picked up through many different games over many years. There is a huge learning curve for most console games like FPS and open world adventures.
When was the last time you saw a non-typical gamer jump in and play something like COD, GTA or Assassins Creed that requires most buttons to be used and both sticks? Non console gamers are completely lost with the controls. My girlfriend sometimes asks to have a go and just runs in circles and couldn't manage both sticks at once, kept asking what button was to shoot etc. and then gives up. It's just not that enjoyable if you can't control the thing easily. I've told her it will come if she persists but it is complicated and frustrating IF you haven't had the slow learning curve we have over many games and genres.
My mate who wanted to know what RDR2 was all about as everyone in her office was talking about it when it came out was the same, she just couldn't get to grips with the controls got frustrated and gave up.
We take a lot for granted as they come quite naturally now having played many games, we forget the controller itself can be a huge barrier.
That's not to say they can't learn but it's not very appealing when the learning curve is so high. That's where more casual games bring people across and slowly introduce controls, mechanics etc. There's not a lot of this sort of content that appeals to the masses on Game Pass. Hence why I think they need more mobile style or casual games if they want to appeal to a wider demographic.
there are so many different things to take into account when they show subscriber numbers like how many people are subscribed for a single month & how many are subscribed for a year , how many are using the £1 for a month or 3 months , how many people got their subscription free by using Microsoft rewards it's not as simple as some people think when they see the numbers
@Tharsman I see the cloud ports on the switch down to lazy developers who don't want to take the time and money to create proper ports. There's like what 5/6 cloud games on there's at the moment and their are mostly from square enix. If the switch was powerful enough than I dare say there wouldn't be any cloud games at all.
@themightyant I'd argue that there a lot of 'relatively' simple games too. A lot of Indie games have 'basic' game-play mechanics. They 'borrow' a lot of the same mechanics that games of the past used. 2D platformers often have left/right and a 'jump' button - maybe an attack/action button but nothing that requires two sticks to control both movement and camera as well as multiple different other buttons, triggers etc to master. In Forza for example, you have a 'left/right' thumbstick control and the triggers to brake/accelerate and that's pretty much all you need to play that game. Some of the most simple games of yesteryear only had a left/right and at most '2' buttons to press.
The point I was making is that the big franchise names will still attract many of the casuals - especially those who are not willing, able or inclined to spend a LOT on their gaming like a 'Hardcore' gamer would. You could argue that Consoles are not really for the Hardcore gamers as they are only just offering 120fps but even 60fps isn't the 'minimum' standard - at best they attract the 'hardcore' on a budget. They are 'cheap' too - enough that they can attract some casuals but with over 3bn gamers worldwide, Consoles only account for a 'tiny' percentage. How many people game on Console 'regularly'? 150m? 200m? Not the 'majority' of the 3bn+ gamers...
Most may well be 'mobile' based gamers playing the 'games' their phone can actually play. Why play Asphalt for example if you can play Forza for example as well as CoD, Fifa, Doom etc - play the same games as Console/PC gamers can without having to spend hundreds. They are all just there to play on whatever 'devices' you have...
With Family plans, the whole family can play these games on whatever devices they have - whether its playing some cute indie simple mechanics based games up to needing the finger dexterity and timing of a professional rock shredding guitarist to get anywhere. The Great Escape wasn't exactly challenging to control and its most difficult challenge is like playing 'Simple Simon'...
Most people don't struggle to play space invaders, donkey kong (the original) or Pac-Man and these were what taught us the basics of 'controllers' that over years have evolved into these multi-stick, multi-button complex mechanics 3D AAA games utilise today but there are a lot of 'simple' games too...
@UltimateOtaku91 Nintendo is still allowing that on their platform. And the first such game was actually Capcom's Resident Evil 7, in Japan only. This is not just lazy devs, this is Nintendo saying "go for it, so long we get money, we don't care if this is just a streaming box."
Interesting comments in the discussions. I trust more in the ideas some of you express here than anything Patcher says: He is pretty much always wrong, with a long list of bold predictions that were bs to his name.
In an era where everyones hunting for the next headline, its no suprise he can still generate them, but his predictions might as well come from a fortune cookie..
@UltimateOtaku91 yep. I've almost always had a console, since original Nintendo days. Heck I even had a Vectrex system in the mid 80s. So to no longer have that, that would make me sad.
100 million is just the beginning with that deal of riot games giving all league of legends characters fully unlocked as long as u have Gamepass that alone is close to 100 million
Are we seriously debating the merits of a Patcher proclamation? In 2022?! lol
This is the guy that said handhelds are dead before 3DS and Switch. The guy that said Vita would kill 3DS. The guy that said consoles were dead before PS4. Are we actually wasting keystrokes on what he might be right and wrong about?
Consoles aren't going anywhere. Retail purchased game libraries aren't going anywhere. They may go up in price. Waaaaaaay up in price to the premium stratosphere, but they're not vanishing, it's just not how most people will spend their gaming money.
@UltimateOtaku91 I doubt we have to worry about it. The Cloud games run on console hardware, currently. MS' goal is plug all holes that keep people from buying games from them. That is what birthed consoles in the first place. They're just a vehicle. So, if they need to make consoles to ferry games to a large set of people (and cash back to MS), consoles will persist.
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