Microsoft Finally Admits Game Pass Hurts Its Sales
Game Pass is one of the best deals in video gaming – and it seems that the deal comes at a cost to Microsoft.
Microsoft was absolutely destroyed by Sony during the PS4 and Xbox One era. These competitors caught up on online gaming capabilities and better offerings than the Xbox One had as a whole. Phil Spencer was put in charge of the Xbox division after Don Mattrick messed up the Xbox One’s chances by trying to focus on media-playing features instead of gaming.
Spencer did something risky when he released the Xbox Game Pass in 2017. It started with a very limited set of games available. Eventually, it expanded to what it is now. 1st party titles are now available on Game Pass the day they come out. Spencer’s stated his goal for Game Pass was to bring gaming to as many devices as possible.
Game Pass eventually spread to PC in 2019 with Game Pass Ultimate. This included both the Xbox Live Gold Membership and Game Pass membership in one. Microsoft even added xCloud, the cloud gaming feature of Xbox on phones, to be included with a Game Pass subscription. The service continues to evolve, and has become one of the best deals in gaming.
Sony released its own version called PS Plus Premium last year. PlayStation’s Shuhei Yoshida stated that it would not do “Day One” 1st party releases like Xbox Game Pass, though. The company doesn’t want to hurt the sales of any of Sony’s 1st party titles. Well, it turns out Sony was right to be worried about that.
via Xbox
…But At What Cost?
Microsoft’s ongoing saga with the UK’s Competition and Markets Authority continues to reveal more and more about the gaming business. According to Kotaku, the CMA’s provisional report revealed that Microsoft’s gaming software sees a decline in sales for about a year after each day one release.
This seems to prove Sony was right to avoid these releases if money is the main objective. The most surprising thing is that this is the exact opposite of what Phil Spencer claimed in 2018. At the time, Microsoft said that Game Pass actually helps sales when asked about day-one releases. Games Industry.biz found in the report,
“Microsoft also submitted that its internal analysis shows a [redacted]% decline in base game sales twelve months following their addition on Game Pass,”
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Phil Spencer also made the same claim during E3 in 2018. It’s possible that the games were likely selling well at the time – trends change constantly. Game Pass has helped make hits out of games that like Rage Squid’s Descenders and Pentiment.
Phil Spencer letting Sony know he’s got big plans
Microsoft sent Kotaku a statement about the report’s findings on Game Pass, which read:
“Xbox Game Pass offers gamers and game creators more choice and opportunity in how they discover, experience, and deliver games. For gamers, that means providing another option for them to discover games and play with friends at a great value. For developers, that means creating another option for how they monetize their games.
We’re focused on helping game creators of all sizes maximize the total financial value they receive through Game Pass. Each game is unique, so we work closely with creators to build a custom program to reflect what they need, ensure they are compensated financially for their participation in the service, and allow room for creativity and innovation. As a result, the number of developers interested in working with Game Pass continues to grow.”
This all tracks with how Phil Spencer has envisioned Game Pass since the beginning. It’s not about the sales, it is about the ecosystem that has been built. Game Pass is now a part of Xbox, PC, Phones, and Tablets making the consumer pool larger and larger than Sony and Nintendo could possibly hope to. They may be losing money now, but Xbox has positioned itself as the most accessible game company of all time.
I have told anyone who will listen and will continue to do so, Game Pass is one of the best deals in gaming out there. Let’s just hope Microsoft maintains its success. Let us know what you think about Game Pass in the comments!
“If we hit that bullseye, the rest of the dominoes should fall like a house of cards. Checkmate” – Zap Brannigan
