Xbox Game Pass Fell Short Of Subscriber Goals Two Years In A Row
All eyes are on Microsoft as its pending acquisition of Activision Blizzard remains up in the air. It's been a long time coming for this deal, since it was first announced in January 2022. The potential purchase is so astronomical that even the government has gotten involved. While there are many different facets of Microsoft as a company, one particular aspect that's been tied to the acquisition is the growth of Xbox Game Pass (via Axios).
Xbox Game Pass doesn't publish all its data, but from what the world does know, the subscription service has over 25 million users. Altogether, this represents 10-15% of Microsoft's revenue. As it relates to the potential Activision Blizzard acquisition, there is concern that "Call of Duty" being available on Game Pass could make Microsoft too powerful. So, ironically, the inability of the company to meet its own growth metrics may work out in its favor. Here are more details on how things boiled down.
Xbox Game Pass still growing despite missing Microsoft metrics
According to Axios, Microsoft has missed its target Xbox Game Pass subscriber metric for not only the past year, but the past two years.
It's worth noting that the Game Pass subscriber metric is directly linked to executives' pay, including CEO Satya Nadella. So, this news comes at a higher cost for some more than others. The way Microsoft sees it, Game Pass is an important sign of the company's success. On top of that, as Axios explained, the metric has been cited as a sign of whether or not the Microsoft acquisition of Activision Blizzard should go through.
As for the numerical details, Microsoft aimed for 73% Game Pass subscriber growth for the fiscal year that wrapped on June 30, 2022. In reality, Game Pass saw 28% subscriber growth. 2021 was similar – according to VGC, the goal was 47.79% growth, while the reality was 37.48%. This is all a contrast from 2020, when Game Pass grew by 85.75%, surpassing the 71% goal.
Of course, growth for Xbox Game Pass can't be infinite. As Microsoft's gaming head Phil Spencer told WSJ Tech Live this month (via VGC), "I've seen growth slow down, mainly because at some point you've reached everybody on console that wants to subscribe." That being said, it'll be interesting to see how the company rebounds from missing the goal, as well as if it has any impact on business or the pending Activision Blizzard acquisition.