Since the launch of Xbox Game Pass, a persistent question has remained – does it help or hurt games sales? Early on in the subscription service’s life, Xbox boss Phil Spencer went so far as to say Game Pass actually helped traditional sales by increasing a game’s profile, a claim that was met with a healthy amount of skepticism. That simply isn’t how it works with any other type of media – you put a movie or music album on a streaming service and fewer (often a lot fewer) people pay to watch or listen, so why would Game Pass be any different? While some games, typically smaller indies, have seen an increase in sales from joining the service, it's perhaps telling that Spencer stopped making broad claims about Game Pass' sales boosting abilities a while ago.
Well, the UK’s Competition and Markets Authority recently published their provisional report on the Microsoft-Activision Blizzard acquisition, and it includes a line that states Microsoft admitted putting a title on Game Pass does indeed cannibalize sales.
"Microsoft also submitted that its internal analysis shows a [redacted] percent decline in base game sales twelve months following their addition on Game Pass."
There’s perhaps some room for interpretation in that line, but Microsoft has since sent issued a response to Eurogamer and other outlets that seemingly confirms it means what it seems to mean. Microsoft doesn’t deny that Game Pass cannibalizes traditional game sales, instead choosing to highlight the fact that they work with publishers to offer financial compensation and other incentives to make putting games on Game Pass worthwhile.
"Xbox Game Pass offers gamers and game creators more choice and opportunity in how they discover, experience, and deliver games," an Xbox spokesperson told Eurogamer in response today. "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 monetise their games.
We're focused on helping game creators of all sizes maximise 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 is the latest bit of recent news that sheds a less rosy light on Game Pass than we’ve heard in the past. Game Pass fell short of growth targets in the fiscal year 2022 despite the Day 1 release of Halo Infinite, and Phil Spencer has admitted the service will likely never be more than 10 to 15 percent of their business.
What are your thoughts on the future of Xbox Game Pass? Is it the future of gaming it seemed to be a couple of years ago or are the benefits it brings not worth the costs?
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