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Although Xbox Game Pass usually gets all the plaudits for its incredible value, questions are often thrown around about its ability to be sustainable. While Phil Spencer recently told the world that Game Pass is indeed profitable, the service seems to be growing at a slower pace than Microsoft had hoped for.
In a new financial filing, via Axios, Microsoft has revealed how its Game Pass growth has fallen quite a bit shorter than the company wanted. To sum things up, Microsoft set a huge goal of growing Game Pass by 73% in the fiscal year leading up to June 30, 2022, yet it only managed 28% growth. This was part of a performance incentive for Microsoft CEO Satya Nadella, as well as other executives within the company.
While that still means the service expanded its user base in the past year, that number is quite a way off Microsoft's target. Still, 28% seems steady to us, and 73% looks like a pretty ludicrous number considering that Game Pass only grew by 37% the year prior.
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Microsoft will be hoping that 2023 leads to a stronger year for the service, and we have every reason to believe that should be the case. 2022 has been an especially quiet year for Xbox Game Studios, whose titles launch day one on Game Pass and help bolster the overall library.
We know of Redfall, Starfield, Forza Motorsport and Minecraft Legends launching in the first half of next year (hopefully!), and there's a lot more in Xbox's pipeline beyond that. Maybe scale back those targets a bit next year, Microsoft?
What do you think to these numbers? Does 73% growth sound attainable? Let us know!
Comments 46
Not exactly surprising - move all your big first party games out of 2022 (yes I understand they needed the time) and with Sony having marketing rights with all the big third-party AAA games you can't fill the hole by paying for them to come to Game Pass day one.
Years back when they had even an inkling they might hit a rough patch like this they should have been more aggressive fighting Sony for the big deals - it honestly seems almost every third-party AAA is with PlayStation for marketing / exclusivity, and the few marketing deals Xbox do get have been released close to first-party games (for example Battlefield and Halo Infinite).
There's been a number of good AA/AAA- games on Game Pass recently and some really great indies, but that's not what's going to bring users to the service in quite those numbers - it's the huge AAA day one games, whether first or third party.
If they get their act together and from next year we're finally getting big AAA well-received first-party games (and a few third-party) regularly then it'll turn around - I'm a little nervous though as since the golden era of the 360 it's always felt like "next year is the one!"...
I have said it from the start of this year 2022
No top AAA exclusives sales in Xbox consoles and game pass will not grow as much and sales will slow. Guess that is what is happening.
We currently have more Xbox consoles sitting on shelf’s in the UK than Christmas cards.
Sell a console you can sell a game pass subscription.
No buzz about Xbox and momentum coming into the Black Friday and Christmas.
If I was in charge I wouldn’t be happy with the VP’s and top dogs below me.
I guess it must be this future strategy thing we keep hearing about, that doesn’t give us one top AAA from their studios for the whole of 2022.
I’m sure gaming was about new games, I must have got it all wrong. Or perhaps Sony and Nintendo have it all wrong as well.
When I think deeply about it, it really is pathetic from one of the richest companies on earth.
To big a management structure, wrong people in the wrong jobs and probably to well off themselves.
It obvious to me over this year Microsoft are just trying to buy themselves into the game development market with recent purchases and deals going through, I thought Sony and Nintendo had their moments but Microsoft currently are lowest of the low with this strategy and also producing no big AAA exclusives this year.
Just wait for next year when the games start dropping..
How can they expect 73% growth with no major game pass releases. I let my sub lapse because of this. Xbox needs some quality heavy hitters to come soon
Gamepass simply hasn’t been good enough to increase that much so quickly. It’s been a weak selection all year with very little new content. Xbox can’t seriously think they’d grow so much by announcing 2 or 3 year old games coming to Gamepass that have been on PS4 and Switch. You have to have an attractive and exciting ecosystem for players to back. The players are free positive PR for the company. I’ve sold people on Gamepass this year and I’m truly disappointed with the output this year. If I would’ve subbed all year, I’m not sure I’d have saved money in exchange for actually buying the games I’ve played on the service. I know I’m not alone in that. The people that get excited for Gamepass are those that are typically more casual or haven’t been gaming for a while, but want to come back to it, in my experience. There’s a huge market for this, but Xbox needs to advertise in a way that speaks to that market as well as people in other ecosystems and push HARD to get that type of growth. We talk about next year, but that’s been the Xbox joke for half a decade now. There’s a constant feeling for the hardcore fans that next year is the year, but Xbox has to finally deliver authentic competition.
That seems like a good growth....73% seems bizarre given the amount of subscribers already
And we won’t see the promised big three before end of June 2023.
I do go on about this, if they release all three before end of June 2023, I so gonna get egg on face. 😂👾. But I’m very confident.
When offering vast majority of games that are equivalent of 1987 Nintendo 8 bit games jumping over lava pits what do you expect? Especially charging $10 - $15.
Waiting to see if they start putting games elsewhere after a year or so of exclusivity to get some 1st party revenue for a change.
Such a shame being honest as they have produced the best console of them all with the series x in so many ways.
As for series s, it will hold it back.
As for game pass value and all that tosh.
That’s must be why as soon as the more expensive PS5 has stock in the UK it sells out like this morning in a couple of hours.
That must be why the top selling UK games are paid for from Sony and Nintendo.
Microsoft you got it all wrong again and you did so much right with the Xbox360 glory days.
Most people might only be interested in gamepass for xbox exclusives, and this year as we all know has been dead for exclusives hence the slow growth.
But guarantee next year is a different story with redfall, forza and starfield releasing.
It's because Game Pass doesn't have those AAA games. It doesn't matter how many games you put onto Game Pass, if the games aren't good then it makes no difference.
Maybe once the ABK deal goes through it will change all of this.
73% are they mad? In a year without a first party triple A exclusive, that was an insane target.
Considering the lack of first party offerings 28% growth sounds okay, good even. I wonder if the big wigs over at MS HQ see it that way though.
I know MS play with Game Pass is aimed at the long run...but, to me, thier approach is kinda odd.
Like other gamers have said, GP is great value for a certain market. BUT, outside of those already subbed and people who come to sites like this, there is like ZERO advertising for what it is the stellar gaming program of MS/Xbox.
Of course, the severe lack of first-party/exclusive games is hurting the program too. I wonder if MS will be pushing hard GP in 2023...
Game Pass is a brilliant service, best deal in entertainment for me, but it's pretty hard to envisage a 73 percent growth rate when they can't get out headline first party or other AAA titles on the service. That's just not realistic.
While I like all the indies and games I wouldn't have otherwise played, there's no doubt that it's the big names that turn heads for the masses, especially if you want to get people to change platforms. They have been severely lacking here.
The solution is to get xCloud onto more devices and start looking into unique content for Game Pass — if not exclusive games then exclusive mods and the like. There's some obvious examples with their own IP, such as Doom and Quake given their rich history with mods on PC, but some third-party examples too, such bankrolling Stardew Valley's or Terraria's developers to make mod-support exclusive to Xbox (as far as consoles are concerned) and then offering certain mods exclusive to Game Pass subscribers.
@Dezzy70 do you spend your entire day checking Playstation and Xbox stock?
To sum things up, Microsoft set a huge goal of growing Game Pass by 73% in the fiscal year leading up to June
Yes why not set up ridiculously unrealistic growth targets and then be surprised you didn't meet them, meanwhile delaying your big firstparty output into the next year, - what were they thinking?
Surely they have data showing how many consoles are sold and extrapolate target growth from there. Without an Xbox console as point of entry into GamePass, there are really no meaningful alternatives.
PC gamepass is growing alot quicker than xbox gamepass
Should go without saying, but MS isn't stupid. 73% was chosen as a KPI for specific reasons, based on growth data that no one here (including the editors) have access to. Two years ago they hit 86% growth, surpassing their goal of 71%. Last year they fell short of the goal by a decent margin. So they're not happy about big of a swing-and-a-miss, or the continued downward trend.
As others have pointed out, the lack of AAA games definitely torpedoed this objective, along with (oddly) near-zero mainstream market advertising and awareness campaigns.
That said, I know this is a fan site, but 27% doesn't seem too peachy to me either. Last year was 37%, and the year before was 86% (the last time they beat their goal). Of course, you could point to more people subbed meaning less prospects converting, but the service it NOWHERE near its ceiling yet. They need to really revisit the service and get the word out beyond the fringe hardcore to grow further.
Perhaps if Starfield had made it this year along with the Activision deal going through before the end of the year they might have made it to closer to that 73% but obviously that didn't happen.
The fact it didn't stay at least at the same % as the year prior however is a bit concerning.
Whilst its not suprising they didn't hit such an unrealistic target, the fact that growth was lower than the previous year will be setting off warning sirens in MS hq.
I think we've seen some signs that head office is doing a little fiscal tidying and I worry about what that will mean for xbox when the metrics dont match their expectations by such a huge margin.
Same old same old, the faithfull have waited every year for an avalanche of new titles, but they never seem to come. I do hope next year bucks the trend.
@Wilshiire I imagine these expectations were set over a year ago when they had a strong 2022 lineup set. Starfield, Redfall, stalker 2, etc.
The gamepass is still incredible value and there are games on there we can all play but as mentioned above in a comments now AAA game yet, no Forza, Starfield, redfalll, fable etc. Sony on the other hand don’t have much either.
@Chaudy
Was looking for PS5 as nephew wants one for Christmas, only bundles about at the minute which is a bit naughty.
There is always Xbox stock 😂
Not surprised. Day one first party, imo, drive GP signups and there was next to nothing this year. Next year is when we will see how fast GP can grow.
@Titntin
You put it so professional and much better than my angry spouts of passion.
@EvenStephen7
I think it will continue to go down even next year or stay around that 27%.
They have lost so much momentum this year with as you said lack of AAA exclusives and zero advertising. To late now and will be to little to late next year and going forward this generation.
@Wilshiire my guess is they set the growth target way before they had to delay Starfield and Redfall.
73 is a crazy number. Was it a typo and they meant 37?
In reality 28% is a very big number in a year where most of their big first party hitters have been delayed.
They need to get Game Pass everywhere!! The main attraction of Game Pass for me is day 1 exclusives. However the current lack of these isn’t the only reason Game Pass didn’t hit it’s target. PS+ doesn’t offer day 1 exclusives, never has yet there are twice as many PS+ subscribers than there are Game Pass subscribers. This is because Playstation massively outsells Xbox. More customers means more subscribers. If Game Pass was available on mobiles, tablets, smart TV’s, motor car TV’s, etc their subs would sky rocket. On the other hand sales of consoles might drop. I have the Series X, my first ever Xbox, an i only bought it for Game Pass. If i could access Game Pass straight from my TV i’d have not needed the Series X. Just an Xbox pad an i’d be good to go. Also altho PS+ doesn’t offer day 1 exclusives they still put exclusives on there after a while. Playstation exclusive games are incredible, they are masters at the single player story driven games, like a Netflix series in video game form and these kind of games are a lot of peoples fav games. The exclusive are the only thing that make me prefer my PS5 to my Series X. As far as consoles go they’re pretty identical but PS has the mind blowing games. Seen lots say they bought PS5 for the exclusives an Xbox gor Game Pass. PS5 has the exclusives available, even if most are remakes/remasters at the mo. New PS players will still be blown away, old PS players are also blown away playing PS5 versions of these games. Plus the PS5 exclusives that are upcoming are pretty much a safe bet that they’ll be ip to the usual standard. Ragnorok drops in a few weeks an for me that’s nailed on to be GOTY. I just really hope games like Starfield, Redfall, etc live up to the hype or next year will be the same again.
@Titntin Yeah, Game Pass needs more Xbox titles. The only ones I remember really being into have been FH4 and FH5. Ironically all the other standout games for me recently have been timed exclusives. Death's Door, Sable, Scorn, Tunic, Gunk... maybe a few others I'm forgetting have been timed exclusives as well. Also a bunch of what I'm looking forward to is timed exclusive, Stalker 2, High on Life and WH:Darktide come to mind. Not sure if this factors into people's perceived value of Game Pass, but it may effect those considering jumping over from Playstation. Or I'm just cursed to like times exclusives for some reason
I actually predict worse results for next year, as those 3 year conversions start to run out. With upcoming price hike, maybe they should reconsider strategy.. it might backfire, even with AAA games coming out, and they could have a Netflix year (one of the strongest years content wise, but still declining in subscription numbers).
@themightyant very much echo what you said.
With Billions of dollars Xbox revenue, I don't think they are particuarly worried as long as the growth continues. Growth naturally slows as you hit market saturation, and saturation for GP isn't the same as console sales at the moment.
The 73% number just sounds like a random corporately produced number.
I work in marketing and have advised multiple companies. You will be surprised how many times CEOs just pull random numbers out of their backsides and then put heavy pressure on their teams to achieve these wild targets.
A lot of my job is managing the expectations of people who have no idea how these things work.
Obviously it depends on how much Microsoft spent on their marketing and what the return on investment was but 28% seems like a decent result in a tough year and there are tons of factors that affect this.
I echo the sentiment they just didn't have the releases for big gp growth like that. Starfield is my number 1 most hyped game rn, but in all honesty I'd rather they delay and get it right, It's better to be worth the wait than out now imo. I think they're working on a good pipeline, hopefully we won't be seeing any more drought years. I was mostly a nintendo gamer for many years (sometimes only Nintendo) so a) i've been really enjoying catching up on games and b) talk about droughts, there were years where nintendo had legit nothing. Like the year leading up to the switch, for example. MS has still managed to get some quality stuff on GP. I'm loving Persona 5 rn, I want to get into Crusader Kings. Are those brand new, groundbreaking games? No but they are great additions
That 70 percent number was made assuming the streaming stick would release and open cloud gaming to everyone in non console markets.
The fact it grew 27% with NO first party releases, is very reassuring. I'm more worried about the silence surrounding Pentiment. I mean, it comes out in less than a month.
Series S is my first Xbox console and Game pass Ultimate has been an amazing value for me. BUT--I've thought to myself many times that if I had owned a 360 and Xbox One that the value wouldn't be nearly as great. I've enjoyed playing games I've never played before, but even I'm starting to wonder when more new games will hit the service.
Funny enough that's in my opinion second time after console launch when I have pleasure to subscribe gamepass once again. Really, there was almost nothing extremely amazing in those two years, for me halo, gears and couple indies but that's all. Now with scorn, persona (?), Plague tale etc. things going to be right.
That's what happens when you bank on the mythical mobile market. These are still good numbers taking into account consoles and PC but I'm tired of so many (not just Xbox) quote these billion or so mobile gamers, the overwhelming majority of whom would never play a console style game or buy dedicated hardware to play.
As I said I still think these are good numbers given their install base and it's clear cloud gaming isn't ready to take off. Then as others have pointed out, you have Xbox's own lack of first party output. When this picks up perhaps those numbers will be even better
I think Xbox needs to bundle some REAL games with the system since they failed on the first party front this year. Nit the F2P games like Rocket League or Fortnite. They started it with FIFA23 but throw a download code in for a Series S and a physical disc in for Series X with a game like Halo Infinite or Forza. Yes they're first party games on Gamepass but it helps customers see more value & lets the game offline. They could even throw in MW2 for maybe $20 more or do a JRPG bundle with Persona 5 included (as an example). Lots of different options but they need to get creative outside of Gamepass as well since this year missed a lot of releases. Should've updated their targets when they delayed Redfall, Stalker 2 and Starfield.
Something really big needs to happen to drive Game Pass to that kind of growth. My personal take is that getting a 73% increase would require something like making call-of-duty fully exclusive, putting the app on every smart TV or finally removing the pay-wall for online play to drive console sales and therefore new subs. If I was a Microsoft or Sony big wig I'd be worried at the success of the steam deck and how valve is moving into hardware business aggressively. Not long before valve release a 'steam-box' console that plays both PS + Xbox exclusive PC ports with free online multiplayer and the worlds biggest and cheapest online market place to boot
No it's not. Game Pass is doing great. Plus, a huge increase in PC players as well. Educate yourself Purexbox. And then post articles.
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