Xbox Game Pass Fails to Meet Microsoft's Expectations
In addition to the problems associated with the acquisition of Activision Blizzard and the need for across-the-board price increases, the Redmond giant has greatly overestimated the influx of new users of the Game Pass service.
Game Pass failed to meet the expectations of the Redmond giant's executives for the second consecutive year. Microsoft predicted that by the end of June (i.e., the end of the fiscal year) their service would attract about 73% more users. In the end, the increase was only 28%. However, this is not an isolated case. A year ago, the service also performed below the expectations of the company's management.
Game Pass and its complicated situation
Additional testimony to the fact that this year's results are not as satisfactory as they should be is the fact that the number of subscribers to the service has not been disclosed. Interestingly, while Game Pass on console is doing not as well as management would have wished, on PC the service breaking popularity records this year, achieving user growth of as much as 159%.
Is it worth it?
But is Game Pass and the overestimation of its popularity a problem for the company? The head of Microsoft's gaming division, Phil Spencer, recently told the Wall Street Journal at a conference that the revenue generated by the service accounts for 10% to 15$ of the amount earned by the gaming division. That's quite a lot for one branch of such a large market giant.
What went wrong?
Microsoft executives see the reasons for the lower growth in interest in the lack of new, exclusive games available through the service. Watching events related to Call of Duty, one can conclude that this problem may be get worse in the future.
A strange time for the Redmond giant
Recall that everything is happening in turbulent times for Microsoft. Unsatisfactory Game Pass results, as well as general price increases are occurring at the same time (the company is not raising them yet, but it's a matter of time) as the complicating Activision Blizzard acquisition case.
