Summary
- Xbox Game Pass may result in up to 80% loss in premium game sales, affecting developer revenue.
- Games on Xbox Game Pass can see a sales benefit on other platforms such as PlayStation.
- Microsoft admits Xbox Game Pass can cannibalize sales.
Xbox Game Pass offers gamers an enticing deal: access to a vast library of games for a single monthly fee. However, this model could lead to significant losses in premium game sales for developers and publishers. According to gaming industry expert Christopher Dring, the service might cause up to an 80% drop in a game's expected premium sales. This impact can affect a game's performance on sales charts, as seen with the recent release of Hellblade 2, which, despite being popular among players, did not meet sales expectations.
Xbox has acknowledged its struggles in the console market, trailing behind the PlayStation 5 and even being outpaced by the Nintendo Switch in the US. Yet, Xbox Game Pass has been a silver lining, helping to mitigate the impact of lower console sales. However, the service's overall effect on the industry is a topic of debate.
Dring, speaking on Install Base, highlighted both the pros and cons of Xbox Game Pass. On the positive side, games available on multiple platforms can experience a sales boost on other systems like PlayStation, as players who try games on Game Pass might be more inclined to purchase them elsewhere. This exposure can be particularly beneficial for indie titles, helping them gain visibility. However, Dring also expressed concerns about the potential for lost revenue and the challenges faced by indie games not included in the service, making it harder for them to succeed on Xbox.
Microsoft has openly admitted that Xbox Game Pass can cannibalize game sales. Despite this, the service faced a slowdown in subscriber growth by the end of 2023. However, the launch of Call of Duty: Black Ops 6 on Xbox Game Pass proved to be a massive success, setting a new record for subscriber additions on launch day, as stated by CEO Satya Nadella. This surge suggests a potential for renewed growth, though sustaining it will be crucial.
$42 at Amazon$17 at Xbox
