Yeah. However, it couldn't be for the same cost. For that kind of service they would need to increase the cost, but it would be worth it considering you'd have access to every game, plus with the added bonus that it would never leave the service.
You'd be looking at something like $100 a month yo make that viable, it defeats the whole point of the service.
Microsoft just needs to get more first party games on there. That will be the true test of the idea. And they obviously know that, hence all the acquisitions. But they're like a couple of years from those paying dividends, so they're kind of in limbo for a while yet.
The fundamental test of this strategy seems to boil down to a couple of things:
1. How willing are people to pay to have the option to play a bunch of games they'd never pay for individually? That's the appeal of something like Netflix, that wide choice that just simplifies people's options: I guess people don't really want to switch their tvs on each night and figure out what episodes of what shows they should watch for like $1 each, or whatever the underlying charge is. That volume of purchase decisions is perhaps just too much anxiety for people. So they just pay a sub upfront and decide between subsequent options freely. So there's that: it's a fundamentally different way of consuming games.
2. Loss aversion: how much can they take in just from people who don't get much value from the service failing to unsubscribe, due to FOMO or just straight laziness? I don't know the answer to this, but it's probably a lot. I probably pay about £50 a month to services more or less on that basis.