Microsoft Admits Xbox Game Pass Negatively Impacts Software Sales
For a while now, the higher-ups at Xbox and Microsoft have maintained that a game launching on Xbox Game Pass does not automatically mean that it will experience lower sales as a result. In fact, the opposite was claimed by Phil Spencer back in 2018, who said that a game launching on Game Pass usually leads to higher sales.
With Game Pass being as cheap as it is and games getting more expensive these days, that statement doesn't quite make sense. Why buy something for $70 when you can download it as part of a $14.99 a month subscription? Whether or not it was true at the time is another matter entirely, but Microsoft has now admitted that games that launch on the service do in fact see a decline in base game sales compared to those that don't.
In a new report (thanks gamesindustry.biz)from the UK's Competition and Markets Authority (CMA), and admission from Microsoft can be found in which it states that a game's launch on the service sees "a [redacted]% decline in base game sales twelve months following their addition." The exact percentage has been redcated in the report due to privacy reasons, so it's pretty much impossible to gauge whether it's a small or large decline, but it runs counter to the argument Spencer made in 2018 about the service boosting sales instead.
It's not a huge surprise, and the percentage probably differs a lot depending on whether the game in question is an Xbox first-party title or a smaller indie, but it does confirm that Xbox is losing out on sales when it puts its games on Game Pass. It's also something that Activison Blizzard seems wary about, as the same report reveals the publisher isn't too keen on putting its titles on subscriptions services as it "severely cannibalise B2P [buy-to-play] sales, particularly in the case of newer releases."
Even though Xbox is losing money, it's probably been happy to eat the cost to keep their consoles appealing. However, with a slew of promising first-party titles on the horizon, it's going to be interesting to see whether Xbox keeps Game Pass the fantastic deal for fan that it is at the moment.
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