A purported survey posted on ResetEra suggests that Microsoft is investigating an ad-supported Xbox Game Pass “Lite” tier that also includes Xbox Live Gold.

The cheaper tier would include Xbox’s entire library of exclusive games, including major first-party titles, six months after release. However, these games would play advertisements at launch to help fund the level. Microsoft also recently patented the personalized ads that appear in games, which seems suspiciously timely in light of the survey.
It might as well be nothing. The recent confluence of events has led some (including me) to speculate that Microsoft is Xbox Game Pass is looking at a cheaper, ad-supported tier.

A post buried in a ResetEra thread shows a recent survey that was sent out to some Xbox users asking what they would think of an additional level of Xbox Game Pass.

If real, the alleged tier would cost $3 a month and give you access to many Xbox Game Pass content with fairly generous limits. This would include an EA Access-like vault of previous first-party Xbox games, with new Xbox games coming to the service on a 6-month delay. Those who would access these download-only Xbox games through this tier would watch an advertisement before the game starts.

Hypothetical Xbox survey

According to the survey, Microsoft is investigating a level of Xbox Game Pass, priced at 3 euros per month, which would include online multiplayer, first-party Xbox games supported by advertising after six months. (Image credit: AImalexia @ ResetEra)
Assuming the table above is correct, this tier includes online multiplayer access, which is currently $9.99 per month, and offers no games beyond the heavily discounted Xbox Live Games with Gold program. Games with Gold now typically only features two Xbox One indie titles per month, and has been the subject of criticism and derision for some time.

This alleged ad-supported Xbox Game Pass “Lite” tier would aggressively undercut Xbox Live Gold’s monthly tier, potentially becoming a headache in this equation. Would Microsoft really be willing to sacrifice the $10 a month Xbox Live Gold subscription for this much cheaper version that also includes a huge number of the best Xbox games? Would the advertising revenue be able to make up for the potential loss here? I, for my part, am skeptical. Microsoft also offers Xbox Live Gold for $60 a year, which equates to $5 a month, but even at that price there is a shortfall to account for with millions of users.

Whether or not the economics work in this scenario is up for debate, but it certainly seems like Microsoft is looking into some form of an ad-supported tier of Xbox Game Pass. The company recently filed patent covers technology that predicts when in-game interactivity is reduced, such as due to a loading screen. Xbox would then serve an ad based on the user’s privacy settings and interests. Online advertising has been a growing segment of Microsoft’s Bing business for quite some time now, and as other subscription services like Netflix explore ad-supported tiers, it makes sense that Microsoft would follow suit.

Can it really happen?

As we often say at Windows Central, patents don’t make products. Microsoft files tons of patents every week based on research it does and said research often doesn’t bear fruit. Likewise, surveys don’t always result in products. Users may overwhelmingly vote against the idea of an ad-supported Xbox Game Pass tier, killing the idea in its infancy.

Either way, we suspect Microsoft is looking at ways further to lower the barriers to entry for subscription services. Xbox Live Gold seems to be a relic of the past, it has been almost completely relegated to the background in marketing in favor of Xbox Game Pass. It is undeniably an important element of the console’s business model. Hardware is sold at (or even below) cost, and software and services profit from it afterwards. If Microsoft did away with the monthly Xbox Live Gold fee without a suitable replacement, it would cause a huge shortfall in cash flow, which doesn’t seem like a very smart move in the current economic climate.

On the other hand, scrapping Xbox Live Gold or adding it to the Xbox Game Pass tiers would be a strong differentiator for Microsoft against the competition, given how much Xbox Game Pass offers in general. I suspect that sooner or later we will see Xbox Live Gold disappear, but only if it makes economic sense for Microsoft.

Source: Resetera