Game Pass Titles 'Lose Around 80%' Of Sales On Xbox, Claims Reporter

Well it's working somehow isn't it!
Not really a shock that sales drop so much if you have gamepass there's no need to buy the game unless you want to!

I guess that seems about right. I have an Xbox for game pass and that means I buy less games, as will all other subscribers. The big question is can the subscription model work long term and I suppose that question has been slightly answered by the multi-platform releases.

Seems a bit steep, IMHO. Back when games had demos, there was likely similar doomsaying about people playing the demo and then not buying the game since they were bored of the demo.

Every time someone finds a method to give us a way to try before you buy, someone else declares that it will 'hurt the sales'. As the first poster puts it, if you weren't going to buy the game, generally you won't buy it.

I have bought quite a few games, both big releases and otherwise, because my experience with the games prior to buying was all good. If Game Pass or Playstation Plus had games never leave the service, that would hurt the sales figures, but, for example, I have Game Pass, and own several first-party Microsoft titles because I wanted to, despite the fact that most first-party titles never leave Game Pass.

Don't the developers get a large sum up front to be on Game Pass that would definitely eat into that 80%? Essentially just front-loading their revenue in one payment from Xbox.

Yes your talking about game sales but what about profit, xbox pays the developer to have the game on gamepass for a profit the developer isn't losing money. Then you should look at player count as well. I think its a win win for everybody.

@Ricky-Spanish

I don't believe a word coming out of Spencer's mouth. If it was working then we wouldn't hear stories like this non-stop.

@CenturianShark @FarmDog08

This would apply for third party but doesn’t help MS at all on its first party games.

I don't believe what he's saying, based on the massive success of Black Ops 6 and Indiana Jones and the Great Circle on Game Pass and on sales charts. Even if it was like that, it would not be necessarily a bad thing, but it's not true.

@FatalBubbles This is true.

I don't like the wording that it "hurts" game sales or they "lose 80% of premium sales" because the reality is that MS pays for some of that or we do through GP subs.

Be more interested to see how it tends to impact the total revenue of a game, because both 3rd party Devs and MS won't be trying to forecast for a loss when deciding to put games on the service, else you'd just keep it off of there

@FatalBubbles yeah be good to know how that all works. Either MS are producing some 1st party games at a loss (if not on ps5) or the revenue stream from GPU is covering it

@Coletrain Right. That's why they dropped the $1 promos, got rid of Game Pass Console and increased the price of the tiers, finding the right balance to optimise revenue. However, before the ABK acquisition, Microsoft revealed that they spend around $1B on third-party deals for Game Pass and that they earned around $8B yearly, so it was still profitable with the $1 offers and cheap Gold conversion. I assume that now it's even more profitable and is working well for them.

Indies will always complain because most of them only sell significantly on Switch, for some reason, but if they get a Game Pass deal they're happy.

I wouldn't be surprised if this was a side effect of low console sales interacting with 'healthy' gamepass subs.

@Coletrain yeah it'd be one thing for MS to take a hit having their games on gamepass, but if being on gamepass is such a hit then third parties would stay away.

@Banjo- I mean, I'm personally happy even if it is games like CoD propping up the rest of the output, but my assumption is that it makes sense to keep doing game pass financially.

I'd honestly love to know how it works though. Like, for an indie dev I assume that they just try to agree a number that means they make a small, risk-free profit and everything after that is a bonus. For a AAA game I'm a bit more hazy on what might make it worthwhile!

@abe_hikura yeah agreed. Some make total sense, like I can't imagine something like persona 3 reload had a massive development budget (comparatively to what we hear about other AAA games).

Win win for me as an Xbox owner though, wish Xbox would release some facts and figures that would just say "yeah it doesn't actually hurt the games revenue"

That is to be expected...

@Coletrain I'm happy for the price to be adjusted if that means Game Pass is a long-term service. The promos were too good to last. About how it works for publishers, for an indie developer, any Game Pass deal is a success. For a publisher like Rockstar, Game Pass is like getting paid for demos, e.g., one of the games of the remastered GTA trilogy was included and GTA V was included a few times, but never for a full year like most Game Pass deals. So it really depends on the popularity of the publisher and game and Game Pass can give something interesting to any publisher. Sega is one of the biggest supporters and also supports Play Anywhere. Capcom, Square Enix and the Western publishers sign specific deals. This is why Microsoft needed to become a big publisher, because they need to feed Game Pass constantly long term.

It's a surprise Game Pass isn't geared toward day-one first-party games, day-one and older indie games, and only older AAA third-party games. It would definitely be cheaper for Microsoft, would probably result in a larger variety/catalogue of games, and could be spun as a service that supports the larger gaming community overall.

Just another example of why Xbox Live was vastly superior to game pass and never should been discontinued.

@Banjo- oh god I remember San Andreas being on GP for a couple months, i thought it was an awful remaster 🤣 but yeah I did play it like a demo I guess so the tactic worked!

@electrolite77 best theory I've seen so far mate. Would sort of indicate that some 1st party titles are essentially made at a loss, but contribute to the attractiveness of the service.

If and I doubt this will happen.
Day one Xbox studio games leave GPU
then so do I.
As simple as that.

@OldGamer999 That won't happen. They have gone through that already. They got rid of Game Pass Console because it included all games and replaced it with Game Pass Standard with online but without some games on day one that are only available on Ultimate.

@Coletrain I guess they pay different companies wildly different amounts and don't want them to know how much of a difference there is.

@electrolite77 yes, but if what they are paid is less than what they would have earned with the "80% lostvsales" the why be on gamepass? Which was my point, it's one thing to think MS takes a financial hit on a "per game on GP" but third parties? If being on GP is a financial hit, they wouldn't be on GP.

@Banjo- there would have to be one hell of a price cut to justify me remaining subbed if they removed day ones.

@abe_hikura Right, that's why it won't be removed from Ultimate. I think that they might make online free and just charge for different Game Pass tiers. They got rid of Gold and the only Game Pass tier without online (Game Pass Console). The next step is making online free. Free-to-play games don't require any subscription and any other online game on the service requires one of the Game Pass tiers, anyway.

I was about to write that I agree about any third-party deal being a good deal for the third party, because third parties don't own Game Pass. It's even worth it for GTA as explained above, the biggest third-party seller since Microsoft acquired Minecraft and Call of Duty. It's also worth it for EA that also tops the charts with EA Sports. It's obviously profitable for smaller publishers with less visibility.

@TeiGekiLord Gamepass is hardly going to boost the sales of games on the service now is it?
The numbers don't surprise me at all I thought they would of been worse if anything!

@GuyinPA75 You make me smile ha!

Lots of reassurances being thrown around in the chat. Maybe they’re valid, maybe they’re not. I have to stop and wonder, If Xbox was spun off from parent company Microsoft tomorrow and its allowance was taken away, would Gamepass actually still be profitable (or even sustainable)?

That doesn’t change whether or not it’s sustainable/profitable now, or the fact that it’s a great deal (for gamers who prefer to spend their money on eternal rentals in lieu of ownership). But it does put into perspective why there are no true gamepass copycats from the other platform holders. When one must earn their keep, one cannot afford to throw daddy’s money at problems to keep one’s strategy afloat.

Well, this is quite vague in my opinion, not necessarily untrue I don't know.

I think there are more relevant metrics here, cause like others in this thread have pointed out, companies obviously get paid when they release in game pass, so (one of) the real question is how much is the money difference between what they get to publish in GP + 20% of expected sales vs 100% expected sales + no GP.

Also, percetanges are quite vague since 80% of something that is expected to sell 50,000 copies (e.g. a relatively unknown indie) vs 80% of something that is expected to sell on the millions, is obviously quite different. Obs, the money they would get paid for releasing in GP is different, but the comparisons might also be.

Finally, there is also the question of 80% loss when; at day one if you release on GP or at different points in the life cycle of the game. Again, games typically drop in price pretty quickly nowadays and expected sales are different at different points in the life cycle so how significant that 80% is is quite different depending on these and other points.

BTW this is not a defence nor the opposite for GP model, it's just that I find these kind of comments (from analysts or whatever) completely useless because they paint a very vague picture of reality that is easily misinterpreted by the "everyday" reader like us. Now, interesting to spark debate, but that's kind of it imo.

@Banjo-
That’s fine with me, GPU day one games all Xbox studios and that’s why I paid the money.
If that deal stays I stay.

@Banjo- you are confusing spending, earnings and profit. We dont have all the numbers so if gamepass is profitable is a guess.

Given the price increases, closing of loopholes and Xbox exclusives going multiplatform Im not so sure their model is doing good enough.

@mac_da_man we see reports that say subscription growth slowed down, now we're probably just seeing maturation of the product. If you look at netflix or disney, they got people through the door, jacked up prices and now they've added a cheaper ad-based tier. I think that's the likely trajectory if things don't grow much next year.

I still think it's likely to be profitable though. Users are still in the tens of millions.

@mac_da_man I'm not confusing anything. I know development cost money, obviously. Microsoft has stated several times that it's profitable and they know more about their business than you. Closing loopholes was always going to happen and the price increase is easy to understand after how many more studios they have now. Game Pass launched early last generation, the price can't be the same. PS also increased their pricing significantly without day one games on any of their tiers and with very few new games this generation to begin with.

@Banjo-

Must have missed those reports…

@mac_da_man You miss many things regarding Xbox.

https://windowsreport.com/xbox-ceo-phil-spencer-says-game-pass-is-profitable-admits-price-increase-may-be-on-the-horizon/

@Coletrain

I hope you are right that its profitable, that would hopefully mean no ads or such in the future

I could do a promotion where I develop an indie game, and offer for people to pay what they want, including nothing at all, and declare that, due to 80% of the people who got the game paying, at point of sale, absolutely nothing, I made an 80% loss on sales, even if those people contacted me later and offered $10-20 since they enjoyed the game and wanted to support me, but I still didn't 'make anything' off those sales in the metrics.

That's why this story is bupkis. Yes, all the millions of players Game Pass has, they don't pay a thing to play the game at launch, but that doesn't mean that suddenly they've lost several million in sales.
It just means they probably got a lump sum based on projected sales, and a good chunk of those GP users who played the game probably put down money when it came off the service.

I would say a day 1 title might potentially lose up to 80% of launch day sales but the developers have to spend nothing on marketing and are guaranteed to get a large lump sum before launch. Titles that don't launch on game pass often need the developers to spend money on marketing to get their game noticed. There is way more and more games getting released day after day, without some like game pass to get people interested good games can get overlooked.

@Ricky-Spanish Taking it disagree with that thought?

But I do honestly prefer Xbox Live and wish game pass never happened. Was much cheaper, at least for me, overall.

All I know is I get all those Day One games on Series x for one great price, I also get them on PC at No extra cost.
Gamepass is the best deal in gaming.

@GuyinPA75 Each to there own buddy but I've played loads of amazing games on gamepass I would of never tried otherwise in a million years a small fee every month for Access to hundreds of games is a good deal for me anyway!

I play games on game pass and if I enjoyed it enough would buy the game. I treat like play before you pay

I don't get the point of the article. I'm subscribing and paying a set amount to have access to the games so of course sales are down. If i didn't have the service I would have to pick and choose only certain games to buy. Instead, I continue paying a set amount to gain access to the library of games they make available. If the millions of people didn't PAY for access to the games then your article would have a point that game sales are down. This is to be expected with a pay service, nobody is surprised. The more important question is where does the $ from the service go? If it's not at least partially to the game developers who put their software on the service then there is an issue with the system.

That's not shocking. Why would anyone expect people to pay for the subscription and pay for the games in that subscription? Obviously a case by case thing too, there is no way call of duty sold 80% less copies on xbox. The benefit of the subscription is you are still getting money from subscribers on months that a game is not releasing there. It also drives sales up on other platforms.

@Rog-X

It would be super annoying though but yeah, I would keep my GPU mainly since my son plays on the a Xbox a lot.

Yep that's what happens when you buy a service. Just common sense.

I'm done with GamePass (Ultimate) just buy the games new disc for console or discounted keys if they are Play Anywhere for console/PC.

@themightyant I think Spencer confirmed without outright saying that pressure is on them now after the Activision buyout. I don't know where exactly the line is drawn (rumors that there are no lines, everything can come to rival platforms) though it's all but been said out loud that the money they spent on Acti is expected to be returned doublefold, and quickly.

We know from the FTC trial that Microsoft internally projected game pass to hit 100 million subscribers by 2030. That is the economy of scale needed to make game pass sustainable and profitable. They flatlined years ago, and are now losing subscribers, in the mid 30 millions. Thus the massive shift in strategy in January and going third party. Game Pass, and the small Xbox user base which has been trained to not buy games, just isn't going to cut it. I say this as a huge fan of Xbox for decades but this boat is very clearly taking on too much water to float again.

I wonder how much in sales Netflix is losing when a movie is added to the subscription service... (that is to say: in other news, fire is indeed hot)

Most of the games are old ones so no way thats true... If it's only about day one releases (3-5 per year?) Its not a big deal since they have about 30-40mil subs paying every month. The fact that people manage to be annoyed and criticize even consumer friendly choices is ridiculous...

@themightyant Don't overthink. The link was only posted because someone said (can't repeat) and that there is no official information about its profitability. I said that the free trials and cheap conversions are not sustainable and I also said that development costs money, obviously.

Analysts are as reliable as them. The truth is that nobody knows more than what has been officially shared. In any case, I'd rather believe Microsoft when they say that Game Pass is profitable than someone saying what they're saying. We have seen the success of Black Ops 6 and Indiana Jones and the Great Circle on Game Pass and on the sales charts, so arguing that Xbox/Game Pass is not profitable without a piece of evidence is completely arbitrary.

Regarding your last comment, publishing exclusive games on other consoles have been a moderate success, but not as huge as some predicted. They are earning more money basically because of the significant growth of Game Pass PC and because the engagement of console players, with more subscribers (no official figure, but hints like day one subscribers record with titles like Black Ops 6) and paying more after removing free trials and downgrading the Gold conversion until it eventually disappears.

I'm not telling you what you have to believe, I'm saying what I believe. Another piece of official information on top of Microsoft's statement and the better link provided by @electrolite77 (I found my link in 5 seconds because of a very basic accusation, but I had read that before on many sites) are hints like Call of Duty records last year, the significant growth of Game Pass PC, the fact that they spend around $1B yearly on third-party deals for Game Pass and earn around $8B before ABK; they likely don't spend more now because they own more first-party studios, but they surely earn more money now as I explained above.

Another important figure is the money that ABK makes yearly (including mobile). It won't take many years to get the money of the acquisition back, even less if you consider that Activision sales have not decreased after being included on Game Pass. Sales of the last Call of Duty were the best in the last decade. The engagement on Game Pass was crazy, astronomical in US (I can share link). I had my doubts not about what the acquisition could mean for Microsoft financially, but if the mobile games would be the main business, but so far all the corroborated news are positive for traditional games. Sure, there will be analysts and blue fans claiming that Game Pass is not sustainable and that Xbox is dead (posted yesterday, not exaggerating anything), but that doesn't mean anything at all.

EDIT:

You have every right to think whatever you want and I never tell other people what they should think. I'm sure about what I'm saying, but I prefer to agree to disagree, especially when the discussion is not going anywhere.

EDIT 2:

Quoted full paragraph as requested on #66.

I guess it’s a judgement call from the developers. Take the cash up front or hope for the sales. I can think of some games - Tunic, Unpacking and Immortality spring to mind - that probably benefited from the exposure of being on game pass.

@themightyant I don't even understand your point - you think that since they spent 70B on ABK, the 100M is outdated and they need... less subs to be profitable? A massive number of subs is the only way for game pass to work. What they have now doesn't work, and it's propped up by the richest company in the world that also happens to also have the tech they need for "free." What Phil Spencer says isn't really worth anything at face value, if you've paid attention to literally anything in the last 3 years. He fudges numbers just like the whole division does, not just in PR but to stockholders as well. Remember them saying game pass was up by 11 million users?

@electrolite77 Subs are not stagnant. They stagnated years ago. Subs are falling. In the last number we got (from Sarah Bond this year), subs were down 3 million, about 8%, over the year and a half since the FTC numbers.

I like how such news are made like some revelation. Well its their choice to trade off traditional sales to GP revenue. Any subscription model means you are trading sales for stable monthly income from subs. If you have enough subs - its profitable.

Any math that analytics did showed that GP is profitable. Probably not much and clearly MS had higher goals but since they jacked up prices and pushed GPU tier more - 90% they are profitable.

If people are worried that devs are loosing - they are not. MS pays them to add game into GP. Reportedly they fully recoup production costs. So its a win-win.
Regarding first party studious from MS - these are salaried workers. And unfortunately we know that MS can get rid of studio regardless of the result.
They said multiple times - they dont care if you buy the game or if you sub for GP.
Now the new strategy is to also get sales on competitors platforms like PS or N. will see if it will backfire. I think it will but less than people say here. I dont think mass exodus from xbox is happening, prob lose another 10M players or so.
Series will likely hit 40M+ in 2-3 years and prob still selling after they lunch next xbox

And now Microsoft announced another round of layoffs across all divisions.

That's every quarter of their 2024 fiscal now.

Microsoft Q1 2024: Layoffs
Microsoft Q2 2024: Layoffs
Microsoft Q3 2024: Layoffs
Microsoft Q4 2024: Layoffs

@themightyant It's way, way over 50 million, there was a consensus from the start among every analyst that talked about game pass for the first few years that it only works with a **massive** subscriber base. Now that it's failed and Phil Spencer has done some Spencerspeak™ about it being "sustainable" you see many people trying to spin that narrative. Nothing has changed, they will never hit the numbers they need, and that's why they are bailing and become a 3rd party publisher. If there was even a chance game pass was on a trajectory to hit what it needed to hit, they would have stayed the course.

@themightyant Fixed it. I quoted the whole paragraph.

Not surprising. I have Ultimate loaded all the way up until March 2026. I’ve adopted a strategy where I’ll still buy my absolute favourite games, so that I won’t lose access to them if I decide to not renew Ultimate next year, but only when they are on steep discount. So I waited two years before adding Psychonauts 2 to my collection when it was 75% off. I’m currently biding my time for Lies of P to drop down enough before I add it to my library. These games are few and far between though and I’m happy to experience plenty of games via Game Pass exclusively. I’m probably in the tiny minority here and the vast majority would never buy a game that they had already finished via Game Pass.

@themightyant 25 million is comically small. They were comparing their subscribers to Netflix and Disney+ during their first year. We know their goal was 100M. Every analyst in those first few years said they needed those kind of numbers for game pass to work. I don't know if you've forgotten/missed that or are just a frog in a pot of boiling water, oh they only hit 30M so that's probably good, this is fine. Meanwhile they burned the entire house down around us this year because it's doing so poorly.

@electrolite77 Microsoft confirmed the 34 million included the people who were converted from gold to game pass core.

Chris Dring is a well known Xbox hater,Xbox hate pays the rent

@Banjo-

If we’re specifically talking about game pass, then sales on other platforms or mobile are not included. MS makes tons of money outside of game pass, but isolating game pass means we dont know if its profitable as those numbers are not shared (and Phils word doesnt mean much here). MS/xbox actions, as I and Mightant are pointing out, tells the story that its not doing good enough for MS/Xbox,. But hey, we’ll find out in due time.