The strategic importance of indie games for Game Pass

Most armchair analysts underestimate how instrumental small budget indie games are to Xbox Game Pass’s success. Most will fly by without a splashy marketing presence, buzz on social media, or even a high score on OpenCritic. But given a Game Pass title’s low barrier to entry (a download or through Cloud Gaming, a click), subscribers aren’t wedded to budget, popularity, and review scores. The right mix of under the radar titles isn’t just helpful to keep subscribers afloat between bigger drops, but I think they are increasingly critical to keeping subscribers happy.

I realize the argument runs counter to traditional gaming sales logic, where the same five to ten AAA games (e.g., Call of Duty, FIFA, GTA V) remain perpetual NPD best sellers. It also seems to contradict Microsoft’s first party consolidation. With the likes of AAA stalwarts like Bethesda Game Studios, Activision, and Blizzard under one roof, one could only assume Microsoft’s goals are to continue mega franchise hits like Fallout, Call of Duty, and Diablo as future staples of the Game Pass library.

But the economics of big budget gaming have limits that smaller games can fulfill. With the build-up of first party studio talent, Xbox head Phil Spencer noted a target release cadence of one big Game Pass game per quarter. That means weeks, if not months, between major games, especially if a AAA release happens to be in a genre that a subscriber doesn’t care for. By subscription service standards, that’s a risky, churn heavy proposition. Microsoft needs at least a few smaller games between heavy hitters to connect.

Small games aren’t just gap fillers either; today, indie Game Pass releases can be more approachable and critically acclaimed than their big budget counterparts. While many small budget games dabble in more unorthodox gameplay and storylines than a AAA equivalent, they also tend to have a smaller scope with a lower learning curve and shorter runtime. When it takes some players to move through just the introductory act of a Final Fantasy JRPG, a player can polish off and finish multiple small budget narratives. Speaking from personal experience, as I get older and my schedule gets increasingly busy, a svelte ten hour or less playtime for a start to finish package has a lot of appeal.

A quick scan of OpenCritic’s top reviewed games of 2022 includes several Game Pass selections from tiny studios: Norco (91), TMNT: Shredder’s Revenge (87), Tunic (85), and Citizen Sleeper (84). On an otherwise dry 2022 for big budget releases, having four critical darlings out of the gate as part of your yearly lineup is noteworthy. And it’s not just niche gaming sites piling on 9s out of 10s. Comparatively, recent micro budget games like Inscryption and Unpacking sold well and got a lot of multi platform attention outside of critical circles.

Given indie games’ strategic importance, I suspect Microsoft will invest more heavily into small budget selections alongside its more visible heavy hitters like Starfield and Redfall. We’ll see less investment around pure game acquisition and release (ID@Xbox has been doing the heavy lifting in this department for years) and more around marketing and publishing.

The new narrative adventure game As Dusk Falls is emblematic of this approach. A year or two ago, a game from such a niche genre – a mature, episodic crime adventure where the player’s decisions influence a branching narrative – would get boilerplate Game Pass coverage. Marking would be a few bullet points in an Xbox Game Pass blog post, a tweet from Game Pass on its release day, and a few minutes of time for standout titles during an Xbox showcase.

Fast forward to today, and Microsoft published the game under their Xbox Game Studios label, ran multiple Twitch streams hyping the release, and hosted a live launch event with the popular streaming group Kinda Funny. Granted, Microsoft’s marketing budget for As Dusk Falls is a fraction of what a blockbuster like Starfield will see (a few TV ads during a primetime NFL or NBA game wouldn’t be out of the question). Still, I see it as an evolution of Microsoft’s strategy.

This change in marketing is where the many comparisons between Xbox Game Pass and popular subscription services like Netflix and Disney+ are especially apt. Game Pass, like your movie subscription service of choice, needs a steady drop of quality content for subscribers to stay happy and avoid bouncing off the service. Game Pass is mature to the point where the content is less of an issue at the smaller budget point. It’s instead how said content is served up and marketed to its audience. As many analysts have noted, it’s sometimes less critical that a subscription service ensures subscribers continuously engage with the content, but instead, the perception that the subscription is of high value. Marketing plays a key role here.

Smaller games can have immense appeal on their own but also require some of the highest leverage, so your audience notices instead of falling back on big budget standbys. While many look solely to Game Pass’s AAA lineup for 2023 and beyond, losing sight of Microsoft’s positioning around smaller games like As Dusk Falls is a mistake. Subscription services are a complex, risky business. Microsoft must engage with its audience at multiple levels through various genres and game budgets to succeed.