has just announced four new free "Games With Gold" for Xbox Live
Gold members on the Xbox 360 and Xbox One.
Starting on Aug. 1, Gold members can download
Strike Suit Zero
for the Xbox One, which each previously cost $20. Gold members on
Xbox 360 can download
, which previously cost $10, between Aug. 1 to 15. Starting on
Aug. 16, members can download
, which previously cost $20.
. Source: Microsoft.
A great deal for gamers, not a great deal for Microsoft
That's a pretty good deal for Gold members, who pay a
subscription fee of $60 per year. But the math tells an odd story
-- any member who owns both an Xbox One and Xbox 360 can get $70
worth of free games in August. And that's just a single month --
Microsoft has been offering new free games every month, along
with big 50% to 75% member discounts on digital games.
Microsoft isn't doing this to be generous -- it's a direct
's free games for PS3, PS4, and PS Vita owners on PlayStation
Plus, which costs $50 per year. Last month, Sony offered six
Dead Space 3
. In August, Sony will offer
Saints Row IV
Far Cry 3
, among other titles. Sony's titles are arguably better known
than Microsoft's August offerings, which puts Microsoft in a
tough position considering that Xbox Live Gold costs more.
Dead Space 3
. Source: EA.
But the gaps in quality, quantity, and cost are only three
problems. The biggest problem is that Microsoft's current Games
with Gold strategy actually encourages Gold members to stick with
the Xbox 360 instead of upgrading to an Xbox One.
Microsoft's love for the 360 could doom the One
Out of the four free Gold games for August,
is the most well-known. It's a triple-A title that sold 3.25
million copies on the Xbox 360, PS3, and PC. Both
were fairly well received -- the former received a 88% score at
review aggregator site Metacritic, while the latter received a
By comparison, the Xbox One's offerings were less loved.
, which was intended to be the spiritual successor to
series, flopped with gamers due to its excessive use of
microtransactions. The game currently has a Metascore of 56%.
Strike Suit Zero
was criticized for its lack of polish and stiff controls, but
fared slightly better with a score of 67%.
Strike Suit Zero
. Source: Born Ready Games
Xbox 360 members who let their Gold memberships expire can
keep the games. However, Xbox One members lose the free games
unless the Gold membership is renewed.
Weaker titles and expiring games aren't a great strategy to
boost sales of the Xbox One, which remains in last place behind
's Wii U and Sony's PS4 in the eighth generation console
Another reason to put off buying the Xbox One
This favoritism of the Xbox 360 bleeds over to upcoming
third-party games as well. The vast majority of new triple-A
, will straddle both seventh and eighth generation consoles.
orderlands: The Pre-Sequel
will only be released on seventh generation consoles.
The math is simple -- there are 5 million Xbox Ones on the
market compared to
Xbox 360s. It doesn't make economic sense to launch a $500
million title like
solely for the tiny next-gen market. Meanwhile, better free games
for Gold members on Xbox 360 could convince gamers to put off
purchasing an Xbox One. If Microsoft wants to wean gamers off the
360 and onto the One, it needs to offer better games for the Xbox
One, while allowing Gold members to retain their games if their
Microsoft has launched good free Games with Gold in the past
-- such as
Assassin's Creed II
Gears of War
-- but those games were all for the 360. Microsoft obviously
can't afford to give away new triple-A titles like
for free, but it could launch limited-time free offers
Xbox Live Gold members on the Xbox One. That wouldn't be much
different from the loss-leading
that it used for
, and it would translate to higher sales of the Xbox One.
The new age of subscription-based content
Looking ahead, Microsoft could turn Xbox Live into a
subscription-based channel for cloud-based games, similar to
Sony's PlayStation Now, which streams PS, PS2, and PS3 games to
the PlayStation TV
or PS4. However, Sony's prices are still too high -- a 90-day
of Final Fantasy XIII-2, for example, costs $30 when the physical
disc only costs $17.
Final Fantasy XIII-2
. Source: Square Enix.
These problems reveal a glaring weakness that Microsoft can
easily exploit. Since Microsoft isn't shy about taking short-term
losses in the Xbox division, it can adopt a similar model as
Prime, which lets members borrow one e-book per month from its
Instead of offering up an entire library of free games to
stream, Microsoft can allow Gold members to borrow a single game
from a handful of new titles every month. As the Xbox One
receives better exclusive games, this could allow Microsoft to
justify raising the cost of the Gold membership.
The Foolish takeaway
Microsoft's current Gold with Games strategy simply isn't
aggressive enough to remain competitive against PlayStation Plus.
Moreover, Microsoft is throttling the adoption of the Xbox One
with its preferential treatment of Gold members on the 360.
However, I believe that an eventual conversion to a
subscription-based, limited rental platform could give Microsoft
an edge over Sony, especially as the latter struggles with
pricing issues with PlayStation Now.
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Why Microsoft's Free Games for Xbox Live Gold
Could Hurt Xbox One Sales
originally appeared on Fool.com.
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