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Xbox Game Pass misses subscriber target, again
Microsoft reveals Xbox Game Pass failed to perform for the second year running
➡️ The Shortcut Skinny: A Game Pass miss
😢 Xbox Game Pass hasn’t had the annual performance that Microsoft wanted
📉 Growth in subscribers failed to hit this year’s target
⌨ Microsoft is more confident in the expansion of PC Game Pass
😯 But don’t expect any major changes to the platform anytime soon
Microsoft has failed to reach its internal Xbox Game Pass growth target for the second year running.
As reported by Axios, Microsoft’s latest annual financial earnings report shows the tech giant aimed to grow the number of Xbox Game Pass subscribers by 73% by the end of June 2022. It fell far short of that, however, increasing subscribers by only 28%.
This is the second year in a row that Game Pass growth has failed to meet expectations. In 2021, the platform’s subscriber base rose by only 37%, missing its 48% target. 2020 painted a rosier picture, when subscribers grew by 86%, outpacing the 71% target.
Despite that drop in growth, the platform is far from failing. The report reiterated Microsoft’s claim that 25 million people currently subscribe to the platform, and earlier this week Xbox head Phil Spencer said Xbox Game Pass was now profitable for the company. He didn’t seem too worried about the stalling subscriber base.
“We’re seeing incredible growth on PC,” Spencer said. “On console, I’ve seen growth slow down, mainly because at some point you’ve reached everybody on console that wants to subscribe.”
He went on to say that Game Pass now accounts for 15% of Microsoft’s total content and services revenue. While he doesn’t expect that figure to grow, it may well peak in the near future when the much-anticipated Bethesda RPG Starfield hits the platform next year.
Spencer also suggested the service may increase in price down the line. Following the PS5 price hike earlier this year, expect the Xbox Series X|S, Game Pass, and Xbox games to become pricier next year.
More unusually, the financial report revealed Microsoft CEO Satya Nadella’s pay is directly tied to Game Pass subscription growth. If nothing else, that reaffirms Microsoft’s faith in the platform, and executive motivation to take it to new heights. Bulking out the Xbox Game Pass library with Call of Duty is likely one of the reasons Microsoft is so bullish about its proposed acquisition of Activision Blizzard.
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