Microsoft’s Game Pass service cannibalizes sales, admits Xbox maker

According to the UK Competition and Markets Authority’s provisional report on the Microsoft-Activision Blizzard acquisition, Microsoft has admitted that adding games to its Game Pass subscription service can negatively impact sales of those titles. This admission contradicts previous claims made by Xbox head Phil Spencer.

Microsoft’s Internal Analysis

The CMA report states that Microsoft has submitted that its internal analysis shows a decline in base game sales for at least a year following their addition to Game Pass. This admission suggests that the Game Pass service may be cannibalizing sales of games that are made available on it.

Phil Spencer’s Previous Claims

Phil Spencer previously claimed in 2018 that adding a game to Game Pass increases sales rather than undermines them. He argued that when a game is added to Game Pass, it gains more players, which leads to more sales of the game. He added that gamers find things to play based on what others are playing.

Activision’s View on Multi-Game Subscription Services

The CMA report also notes that Microsoft stated that Activision had a negative view on putting its titles into multi-game subscription services on any platform. Activision believed that this could severely cannibalize buy-to-play sales, especially for newer releases.

Challenges for Microsoft

Microsoft faces a range of challenges in the gaming industry, from console competition to maintaining a strong game library. However, the admission that its Game Pass service can cannibalize game sales presents a unique challenge for the tech giant.

Implications for Gaming Industry

The rise of subscription services like Game Pass has had a significant impact on the gaming industry. While it offers a cost-effective way for gamers to access a wide range of titles, it also has the potential to harm game sales for publishers and developers. As more subscription services emerge, it is likely that this trend will continue.

Conclusion

The admission from Microsoft that Game Pass can cannibalize game sales is a significant development in the gaming industry. As the industry continues to evolve, subscription services like Game Pass will continue to play a prominent role. However, the impact they have on game sales will be an important issue for publishers and developers to consider.