While it seems like this is something we all knew, Microsoft has come out and confirmed that sales for games have been negatively affected by the subscription service.
As revealed in a report from The UK Competition and Market Authority (CMA) and per GamesIndustry.biz, was admitted by Microsoft that games added to its Game Pass subscription service see fewer sales.
This is counter to what Phil Spencer said back in 2018, that Game Pass led to more sales.
“When you put a game like Forza Horizon 4 on Game Pass, you instantly have more players of the game, which is actually leading to more sales of the game,” Spencer mentioned to GamesIndustry.biz. “You say, ‘Well isn’t everyone just going to subscribe for $10 and go play this thing?’ But no, gamers find things to play based on what everybody else is playing.”
The exact sales percentage is not revealed in the report from the CMA but it basically describes the scenario many developers face now with being on Game Pass. A game is launched on the service with tons of buzz around the title being on the service, giving the game a boost before tapering off in sales.
The news is buried in a 277-page report, but the paragraph confirms that the service shows a decline in sales for many of the games added to the service.
“Microsoft also submitted that its internal analysis shows a [redacted]% decline in base game sales twelve months following their addition on Game Pass,” the CMA report reveals.
Now, I don’t think Phil Spencer was outright lying at the time he said those remarks. Instead, it feels like the service ballooned over the years to make the service better for consumers but worse for developers.
At one point, Game Pass was going to be a rental service, with Sarah Bond saying that 75 percent of a game’s revenue used to be made in the first two months of release,” said Bond. “Nowadays it’s spread over two years.”
This no longer seems like the case as it were with the report from the CMA showing things have changed. If you look at Netflix or Disney+, two of the biggest streamers in the world, you’ll see both services have stalled in subscriber count or seen a loss. It’s clear you also need original content on your platform to keep people coming back, something Xbox has struggled with for some time now.
Is it sustainable for Xbox to put their exclusives on Game Pass on day one? Things no longer seem clear as day and while it would be nice to see things turn around, it doesn’t seem like the right choice any longer.