Black Ops 6 is make-or-break for the Game Pass strategy | Opinion

It’s just over a year since Microsoft shattered industry records with its $75 billion acquisition of Activision Blizzard – and next week, that eye-wateringly expensive deal will face its most important test yet.

The launch of Call of Duty: Black Ops 6 will be a major data point both for Microsoft itself, and for external observers, as they try to puzzle out the value of the deal and the kind of strategy we’re likely to see from the company in the coming years. That’s because Black Ops 6 will be available to Game Pass’ premium tier subscribers at launch – a major coup for Game Pass, but one whose costs and benefits remain pretty much impossible to predict.

This launch is a landmark in the grand experiment that is Microsoft’s integration of Activision Blizzard and its catalogue

It’s not unfair to say that Call of Duty was the Activision IP that Microsoft was most desperate to acquire; it was this franchise that justified that extraordinary acquisition price tag, to the extent that it can be justified at all.

However, owning Call of Duty has actually left the company in an odd position, since it now owns a massive franchise that generates a very large slice of its revenues on PlayStation. Fears that Microsoft could make the franchise Xbox-exclusive were never realistic; even if the Xbox leadership wanted to do that, slashing the revenue potential of such an expensively acquired new subsidiary would never pass muster with Microsoft’s top management.

Sony’s big fear, and the reason it lobbied competition authorities to block the acquisition, was a little more nuanced; it feared that Call of Duty would be a Game Pass exclusive as a subscription title, tilting the competitive landscape by allowing Microsoft to point out that people paying $70 for the game on PlayStation could instead be playing it for ‘free’ on Game Pass.

That’s exactly what has come to pass – and now it’s time to run the experiment and test the theory. The performance of this launch, and in particular the impact that the day-and-date availability on Game Pass has on sales on other platforms, will be watched very closely both by Microsoft itself and by its rivals.

Getting to the point of being comfortable with launching Black Ops 6 day-and-date on Game Pass, however, has taken some strategic rearrangements on Microsoft’s part, with the balancing act it is performing sometimes being quite public. It needs Call of Duty to be a big deal on Game Pass in order to grow the subscription service, which is seen as a crucial metric of the success of its overall games business. However, it also needs Call of Duty to make a boatload of money, as it always does, since Xbox still effectively has a $75 billion IOU made out to Microsoft’s coffers and can’t afford to sacrifice the earning potential of Activision’s biggest IP at the altar of Xbox’ long term growth.

Consequently, we’ve seen price increases and rebalancing for Game Pass’ tiers ahead of this launch. Xbox players will need to be on the most expensive $19.99 per month tier to get CoD on the launch day, although it’s still going to be available on the PC’s $11.99 tier, presumably a concession to a more price-sensitive market. Microsoft has also suspended the $1, 14-day Game Pass trial it usually runs, although this isn’t a new strategy – it did the same thing before the launch of Starfield and will presumably adopt this as a policy for major day-and-date launches in future as well.

The rebalancing act, however, was a tough call; it was unpopular with consumers (naturally enough) and arguably a risky thing to do at a point when Game Pass’ growth seems to be struggling to move past a plateau stage. If CoD is going to be a Game Pass title, though, the company needed to be satisfied that Game Pass would be an attractive option for fans of the franchise, without risking sinking launch revenues for the game. I’m not sure that’s actually a balance that can be successfully struck, and I suspect that some internal discussions about whether CoD should even appear day-and-date on Game Pass were pretty heated, but there wasn’t really a choice here – without the ability to leverage this IP to push Game Pass, the entire value of the Activision Blizzard acquisition to Xbox would be thrown into question.

Thus we end up with a bit of a halfway house of compromises. Black Ops 6 goes to Game Pass on day one, a coup for that service; but only to the most expensive tier, and only after a price hike for the service.

If grabbing the launch-day exclusive subscription availability for one of the industry’s biggest franchises can’t move the needle for Game Pass, it will raise some questions about Game Pass’ content strategy

If many people subscribe for a month to play the game and then cancel, it’ll still end up being a significant loss to the games revenues, which is no doubt a significant fear for some people involved in the planning of this launch. Meanwhile, the odds are that the lion’s share of sales of the game will be on PlayStation 5 – revenue that will be very welcome on the bottom line of Microsoft’s games business, but of which Sony will also be taking a pretty tasty slice as well.

Another cost that’s hard to calculate is that Black Ops 6 will presumably be launching without the marketing support and partnership revenue the franchise has traditionally received from Sony. Depending on how the Game Pass situation shakes out – how many new subscriptions this drives, and how long those new customers stay subscribed – it remains at least marginally possible that Sony ends up being the company that enjoys the most black ink on its financials from this launch, which is a bit of a bum note in what should be a triumphal moment for Xbox.

Part of the issue here is that the strategy around Activision Blizzard’s content on both Xbox and Game Pass over the past year has been very, very slow to take shape, and quite weird in the shapes it has eventually assumed.

Browsing Game Pass today gives absolutely no hint that Microsoft spent $75 billion on buying a major publisher to bolster this service. By my count only three Activision Blizzard games have made it to Game Pass; only one of them is a Call of Duty title. I was honestly surprised to discover that the CoD back catalogue isn’t up there – that feels like incredibly low-hanging fruit, with the launch of older games (even just their single-player campaigns) on Game Pass being a pretty obvious way to drive interest and enthusiasm ahead of the huge ‘event’ that is the Game Pass launch of Black Ops 6. ‘Get ready for Black Ops 6 by subscribing to Game Pass and playing through the old campaigns’ is a straightforward and appealing message, and it’s nothing short of weird that it didn’t happen.

Browsing Game Pass today gives no hint that Microsoft spent $75 billion on buying a major publisher

All of these misgivings will evaporate, of course, if Black Ops 6 really can drive a huge surge of Game Pass sign-ups – and then maintain those subscriptions for at least a few months. If not, though – if grabbing the launch-day exclusive subscription availability for one of the industry’s biggest franchises can’t move the needle for Game Pass enough to change the sales pattern for the game at least a little – then it will bring to the foreground some questions about Game Pass’ content strategy that have been getting harder and harder to ignore over the past year or two.

Either way, this launch is a landmark in the grand experiment that is Microsoft’s integration of Activision Blizzard and its catalogue. How Black Ops 6 performs next week – and on which platforms that performance is strongest – is going to play a major part in setting the tenor for Microsoft’s overall games strategy for years to come.