Ok, so my conclusion (correct if I am saying dumb stuff):
I will take Sony in 2018 to make my point.
This year will probably be their biggest ever in terms of first party software sales. Both God of War and Spiderman will easily sell 20 million together. Lets extrapolate at least 10 million out of those 20 million copies to be sold at full price, which means $600 million in revenue. The rest of 10 million will count discount codes, black friday sales, etc. Lets eat half of that price, so 10 million x $30 = $300 million. Then we have other stuff, like MLB18, Detroit, Shadow of the Colossus and other smaller stuff. Lets be gentle and say it ends up at 5 million, giving it an average pricetag of $30, which means $150 million. Then there are sales of old games. All in all, we are looking at ~1.4 billion in revenue in their best year ever and being extremely generous with every data.
To reach that kind of revenue, they would need 10 million GamePass subscribers per year, making 1.2 billion. Considering they can sell their games to 10 million different people at $60, the inference we can have here is that putting those desired games on the service would make people migrate to there, after all they will all be $10 instead of $60. So it is not that hard to make it attractive and reach that kind of audience if they want it. That said, keeping these people subscribed is another question. Keeping the content hot is the secret. What if people subscribe just to play TLOU2 and then let it expires? Content is the key here and I am sure they would find a lot of third party studios interested in putting their games on a service with so much visibility (considering 10 million subscribers).
Eventially, those 10 million subscribers can grow. But their annual revenue by first party software will never reach those highs every year. 1.4 bi per year is the exception. At 15 million subscribers they have 1.8bi revenue per year. And so on.
All in all, yeah... I think it is a good strategy.
Unless I am missing something?
