This week, Microsoft surprised a few investors by revealing that it had not met its expected growth targets for Xbox Game Pass for the year.
Xbox Game Pass increased 37%, missing a target of 49%, compared to the previous year when it increased 86%, beating a target of 71%. This news also does not contain information on the total number of Xbox Game Pass subscribers, as we have heard it is 18 million, but the most reasonable estimates assume that the tally is now at least. 30 million, and it’s unclear why Microsoft continues to not want to share a number.
All the bad news feeds into the console war narrative, and we’re already seeing feelings like “Game Pass has climaxed! There, but I think there are pretty clear reasons as to why this happened.
First of all, the previous year the pandemic kept people in literal lockdown, and a service that allowed virtually unlimited video games to be played for a low cost looked very appealing. Second, you’d expect Xbox Game Pass sales to increase after the successful launch of the Xbox Series X and S, a non-controversial Xbox One-style console.
But over the past year, I’m not surprised to see such a drop, and Microsoft shouldn’t have been either. Not that we haven’t had good Game Pass deals this year, but we’re still ahead of a window that is expected to generate even more Game Pass sales, the near-simultaneous launch of two massive Xbox exclusive games, the biggest of this new generation to date, Forza Horizon 5 in November and Halo Infinite in December. There just hasn’t been a Game Pass launch, even close to those two over the past year, and Xbox continues to ramp up its first-party offerings this generation, a little behind Sony in that department. So no, I’m not surprised to see Game Pass’s growth decline in a year where there was nothing at this level of release for the service. Outriders is not Halo Infinite, for example.
Having said that, I don’t know if Microsoft can bank on massive Game Pass growth forever. At some point, you might hit a slowdown cap where every Xbox owner knows it exists and has already made up its mind to buy or not. Granted, that can change over time, but these crazy increases may not keep happening. We see this all the time with other subscription services like Netflix’s “grow at any cost” model of canceling even good shows after two seasons because after two seasons they have data showing that the others do not bring in enough new subscribers. growth. Hopefully Microsoft doesn’t get pulled into this hole.
We’ll see how the Game Pass performs over the next year, but between Forza, Halo, and Starfield, I guess it’ll be a lot better this time around.
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