Support NeoGAF

[FalsettoVibe]

https://www.axios.com/2022/10/27/microsoft-xbox-game-pass-miss

This is information based on a new financial filing from Microsoft. Yesterday, at the WSJ conference, Phil Spencer had stated that Game pass was profitable, but that growth was slowing on console.

• Game Pass achieved 28% growth for the fiscal year ending June 30, 2022, but the target was 73% growth rate. This fell short of a target tied to the pay of CEO Satya Nadella and other top executives. This is the second year in a row Game Pass has missed the growth target, having exceeded the target in 2020.
• Microsoft wasn't specific about subscriber target counts, but claimed delivery of "over 25 million Game Pass subscriptions."
• The success of Game Pass is pertinent to the Activision deal, as the UK's Competition & Markets Authority has suggested that if Microsoft puts Call of Duty on Game Pass, there could be "substantial lessening of competition" in "multi-game subscription services." Microsoft denies that putting Call of Duty on Game Pass would require blocking the deal, arguing that PlayStation could put better exclusives on its own subscription service or even offer Game Pass on PlayStation.

 

[analog_future]

The delay of Starfield, recession/inflation concerns, and a slow year for AAA titles I'm sure all factor in.

2023 and beyond should see much, much larger growth though.

 

[DeepEnigma]

arguing that PlayStation could put better exclusives on its own subscription service

Oh the irony the past year alone. Irony. indeed.

 

[FalsettoVibe]

The delay of Starfield, recession/inflation concerns, and a slow year for AAA titles I'm sure all factor in.

2023 and beyond should see much, much larger growth though.

I think 2023 will see larger growth simply due to more consoles and bigger games coming out but I don't know if it will be massive. We'll see I guess....

 

[feynoob]

With games being only on xbox series, it is expected that gamepass growth to be slow.
Until xbox consoles are over 30m, I don't see the sub get higher.
Pc side is their hope now.

 

[Zathalus]

Well yeah, 2022 was a big fat nothing from Microsoft.

 

[Jennings]

I'm sure people are just waiting for the upcoming new releases that weren't available in 2022. 2023 should blow the doors off. Of course, I plan to actually purchase all the games I'm looking forward to, bit it's possible I'll be in the minority if these suckers are charging $70 for buggy 30fps base games.

 

[Killer8]

There are only so many people you can reach without the platform sales to back it up.

 

[SirKicksalot]

Make it available in more countries
Put it on Steam like EA does

 

[Interfectum]

With games being only on xbox series, is expected that gamepass growth to be slow.
Until xbox consoles are over 30m, I don't see the sub get higher.
Pc side is their hope now.

The PC side will eventually hit a peak too. Most PC gamers will stick with Steam.

 

[Banjo64]

This fell short of a target tied to the pay of CEO Satya Nadella and other top executives.

BALDY GO BRRRRRRRR

 

[Ghost of Caelid]

73% is an insane expectation when you aren’t putting out compelling content for a whole year. That’s on them and the management of their teams. 2023 should be better but what did you expect a full year of no first party games?

 

[feynoob]

The PC side will eventually hit a peak too. Most PC gamers will stick with Steam.

Except gamepass is a sub, not a store. It can coexist with steam.

 

[MarkMe2525]

Not surprised. Like many have stated, there has been no output that would facilitate mass adoption of the service. MS needs the can't miss content.

 

[Snowdonhoffen]

• Microsoft wasn't specific about subscriber target counts, but claimed delivery of "over 25 million Game Pass subscriptions."

And remember last year when everybody thought GP had 30 million subs? lol
It seems like Halo and Forza could only do so much, but we need to wait until titles like Starfield, which I think will have a similar reception to Elden Ring, start hitting the service and see how this impacts the subscriptions.
No wonder why they want COD in there.

 

[Ezekiel_]

Create a 'First party only' tier, and fully become third party and release all your games on PlayStation and Switch.

 

[22•22]

omg subscriber targets

 

[Interfectum]

I'm sure people are just waiting for the upcoming new releases that weren't available in 2022. 2023 should blow the doors off. Of course, I plan to actually purchase all the games I'm looking forward to, bit it's possible I'll be in the minority if these suckers are charging $70 for buggy 30fps base games.

I disagree. Why would you own an Xbox and not get Game Pass? Plenty of games have been on the service this year. Also, with all of these cloud apps appearing across phones and TVs one would assume cloud only subs should be skyrocketing towards that promised billion gamers. What's going on there?

My theory is cloud demand is non-existent and the market for game subscriptions is smaller than people think. It's why Phil Spencer is ALREADY pivoting towards free to play.

 

[Ass of Can Whooping]

How were they even expecting 73%

That can't be because of Starfield or Forza since they should have already been aware they were late 2022 titles at best

 

[feynoob]

Create a 'First party only' tier, and fully become third party and release all your games on PlayStation and Switch.

I think I need some of that smoke, that you have.

 

[cireza]

73% growth rate

 

[Captain Toad]

Make it available in more countries
Put it on Steam like EA does

This may be the one way for me to resub. If I could play it on SteamDeck, it might be worth it.

 

[akaFullmetal]

Seems they've been stuck on about 25 mil users for a while. Seems like that is the roof at the moment unless big games come or more consoles get sold somehow. Alas we must wait...

 

[feynoob]

How were they even expecting 73%

That can't be because of Starfield or Forza since they should have already been aware they were late 2022 titles at best

They messed up their plan, by jumping on full next gen games.
So old xbox one users are now useless.
I can't play some gamepass games, because I don't own xsx/s.

They will be below the target for a while, until the console is at higher userbase.

 

[Interfectum]

Except gamepass is a sub, not a store. It can coexist with steam.

Steam gamers tend to keep games in their own ecosystem. I'd imagine more people will buy Starfield on Steam than sub on GPPC to play it.

It can co-exist but will always be niche at best.

 

[MadPanda]

This is why people saying Microsoft doesn't need consoles are wrong. Consoles are the main driver behind gamepass and other gaming revenues.

 

[FalsettoVibe]

I think one of the problems with GP is that MS is gonna need a bunch of continuous content to keep people satiated so they keep their subs.
If not people will just sub for games they want then unsub when nothing grabs their attention imo...

 

[Jaybe]

So that confirms they take the growth number at the end of June (their fiscal year end), as the read for executive compensation. Doesn’t surprise me they committed to releasing Starfield, Redfall, and Forza Motorsport by June 2023 at their last event. Not sure why their target was so high to begin with though. Possibly had unrealistic expectations for Halo Infinite when they were set.

 

[Interfectum]

This is why people saying Microsoft doesn't need consoles are wrong. Consoles are the main driver behind gamepass and other gaming revenues.

Yup. The CEO drinking that Azure koolaid thinking cloud-only gamers will come in droves. Not going to happen as most will use the respective app stores and stick with F2P games.

 

[analog_future]

They messed up their plan, by jumping on full next gen games.
So old xbox one users are now useless.
I can't play some gamepass games, because I don't own xsx/s.

They will be below the target for a while, until the console is at higher userbase.

You can play all Series S|X exclusive Game Pass games on Xbox One via Cloud Gaming.

 

[legacy24]

here's a thought for you Phil maybe it's because you have not dropped ONE worthwhile exclusive this year. no shit your sub counts are going to slow down

 

[SF Kosmo]

The delay of Starfield, recession/inflation concerns, and a slow year for AAA titles I'm sure all factor in.

2023 and beyond should see much, much larger growth though.

Starfield and Redfall were both pushed out of this year leaving not much for big first party exclusives. I imagine it's a slow year for the industry at large to be honest.

 

[Punished Miku]

If they actually put out Starfield maybe, but even still 73% was pretty optimistic.

Starfield will drive new subs though if it's even close to as popular as Skyrim. 28% seems good to me, but what do I know.

 

[feynoob]

Steam gamers tend to keep games in their own ecosystem. I'd imagine more people will buy Starfield on Steam than sub on GPPC to play it.

It can co-exist but will always be niche at best.

You misunderstanding gamepass.

The service is a sub. You can play it, without buying the games on pc.

This is very beneficial for pc users.

With 10$ a month, they can test those games. If it's good, they can buy it on steam.

Hence both platform can coexist. Gamepass won't make them not buy the game on steam. It will encourage them to do so.

 

[[Sigma]]

1st party output is to blame. Will change when that change.

 

[Skifi28]

You can play all Series S|X exclusive Game Pass games on Xbox One via Cloud Gaming.

 

[Interfectum]

You misunderstanding gamepass.

The service is a sub. You can play it, without buying the games on pc.

This is very beneficial for pc users.

With 10$ a month, they can test those games. If it's good, they can buy it on steam.

Hence both platform can coexist. Gamepass won't make them not buy the game on steam. It will encourage them to do so.

Worthless to do so when Steam has a fantastic refund policy.

 

[Phil_the_goat]

Create a 'First party only' tier, and fully become third party and release all your games on PlayStation and Switch.

No need for port begging, because series Success is really cheap.

 

[Deerock71]

 

[feynoob]

You can play all Series S|X exclusive Game Pass games on Xbox One via Cloud Gaming.

I know, but that is not good for the service. It hinders its growth, by limiting the userbase.

 

[tmlDan]

The delay of Starfield, recession/inflation concerns, and a slow year for AAA titles I'm sure all factor in.

2023 and beyond should see much, much larger growth though.

I agree with your points but I am not so sure about much larger growth.

I actually think the growth they'll see with starfield will be on the PC side - much like what they announced yesterday.

The series X/S audience just isn't there yet and might not be even next year.

 

[Robb]

Not surprising with all the major GamePass games being delayed. Steady content is king when it comes to these services.

Being 45 percentage points off target is pretty awful though..

 

[feynoob]

Worthless to do so when Steam has a fantastic refund policy.

That doesn't matter.
These guys are seeing the game on gamepass. They won't waste time with refund, when they can play it for 10$.

Value beats everything.

 

[adamsapple]

28% growth with all the major AAA games delayed into next year.

Eh, not bad. 70% was a very very high bar of expectations.

 

[Pallas]

Create a 'First party only' tier, and fully become third party and release all your games on PlayStation and Switch.

It’s good to dream sometimes, I guess.

On the topic, that is sone crazy expectations but 2020-2022+ have been turbulent times plagued by a lot of uncertainly and economic instability so it’s also not surprising they didn’t hit their goal.

 

[DenchDeckard]

Expected with no huge big hitters this year. Will be a concern if its still slow next year with starfield etc

 

[TheGodfather07]

No shit. There hasn't been a must play game on the service for the whole year.

 

[Thirty7ven]

Still stuck around 25 million? Did I read that wrong? Thought it was at 25 end of last year.

 

[Jennings]

I disagree. Why would you own an Xbox and not get Game Pass?

Too expensive for the number of games I'd play on it. Every year I sign up for the $1 90 day trial and ever end up playing anything. Typical Gamepass games either aren't my type of games or they're so old I already bought them on sale before they were added to the service. The one singular exception is Forza Horizon 5, a game I don't own but would play on Gamepass, but it's not worth $15 a month when it will already be deeply discounted soon.

No idea about the other stuff you mentioned, it's not a noteworthy feature for my personal needs.

 

[Chukhopops]

How were they even expecting 73%

That can't be because of Starfield or Forza since they should have already been aware they were late 2022 titles at best

Yeah I don’t get it either, they were targeting 35M subscribers?

Either that was made before the Starfield delay or someone was feeling really ambitious when this target was set.