Microsoft’s tone regarding Xbox Game Pass seems to have changed. While Xbox boss Phil Spencer used to trumpet Game Pass whenever he spoke, making it seem more important to Microsoft’s future than Xboxes themselves, in a recent interview he admitted the service would likely never account for more than 10 to 15 percent of their gaming business. Microsoft has also downplayed the value of cloud gaming, until just recently pushed as a key component of Game Pass’ growth.
Well, there may be a reason for the sudden shift in tone. According to financial filings acquired by Axios, Microsoft had a target Game Pass growth rate of 73 percent for the fiscal year 2022, which ran from July 1, 2022 to June 30, 2022. Of course, that period saw one of Microsoft’s most-hyped games, Halo Infinite, hit the service on Day 1, so a 73 growth rate wasn’t pie-in-the-sky stuff. Despite that, Game Pass missed its mark badly, only achieving a growth rate of 28 percent.
This is the second year in a row Xbox Game Pass has failed to hit targets, with the service growing by 37 percent in FY2021, short of the 48 percent growth expected. The service did hit growth targets in FY2020. Exact subscriber numbers for Game Pass aren’t regularly provided, although the service did pass the 25 million mark back in January. Per Axios, various “performance incentive” bonuses for top executives like Microsoft CEO Satya Nadella were tied to Xbox Game Pass hitting its growth target.
We don’t know for sure if Game Pass missing its targets is the reason for Microsoft’s changing tone regarding the service. Perhaps Microsoft is just playing down Game Pass’ potential to get their $69 billion Activision Blizzard deal past regulators. That said, when you fire your best available shot in Halo Infinite and still miss your target by nearly 50 percent, that’s probably cause for some reflection.
What do you think? Is Xbox Game Pass’ momentum petering out? What can Microsoft do to stir up excitement for the service again?
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