Microsoft might be going all-in with pushing its Xbox Game Pass subscription service but as per the latest financials from Redmond-based tech giant, Xbox Game Pass, for the second consecutive year, could not meet Microsoft’s growth expectations.
Xbox hardware revenue has grown by 13 percent and a newly sought-after agenda to push PC Game Pass has resulted in the service increasing 159 percent YoY. While the numbers are good, it still isn’t enough to meet Microsoft’s expectations for the service, as reported by Axios.
For the financial year ending June 30, 2022, Microsoft had sought a 73 percent growth rate for Xbox Game Pass, but fell short by 45 percent, only to manage 28 percent growth. Similarly, it could only manage to hit 38 percent growth, failing to meet the 48 percent target in 2021.
What could be the reason behind the Game Pass slowdown?
While the figures are indeed suggestive of the platform’s lack of first-party game releases in 2022 and Halo Infinite’s underwhelming response, in contrast, rival PlayStation has relaunched PS Plus to include a game library similar to Xbox, which contains some of the largest PlayStation Studios offerings from Sony, such as Ghost of Tsushima Director’s Cut and Returnal.
Phil Spencer, Xbox Head, speaking at WSJ Tech Live, hinted that Xbox Series X/S console prices and Game Pass subscription prices could increase in the future. He noted that despite witnessing increased growth, the demand for its subscription service – Game Pass – is slowly fading.
The number of active Game Pass subscribers is expected to increase as a result of highly anticipated first-party launches, including Starfield, State of Decay 3, and Redfall that are planned for release on Xbox consoles and PC in 2023. In the following years, titles like the Fable relaunch, Avowed, and Indiana Jones will also strengthen the Xbox first-party catalogue.
Until then, Sony’s games like the upcoming God of War Ragnarok and Spider-Man 2, scheduled to launch on the PlayStation 5, will impinge on Xbox.
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