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Microsoft Admits Xbox Game Pass Eats Into Sales

Microsoft has admitted that its Xbox Games Pass subscription service directly harms the sale of flagship titles, rather than benefitting them with the wide exposure.

While this may seem obvious — people don’t go out and buy the White Lotus DVD after first seeing it on Binge — Xbox CEO Phil Spencer has previously claimed the opposite is true.

“When you put a game like Forza Horizon 4 on Game Pass, you instantly have more players of the game, which is actually leading to more sales of the game,” Spencer said in 2018, six months after the service’s launch.

“You say, ‘Well isn’t everyone just going to subscribe for $10 and go play this thing?’ But no, gamers find things to play based on what everybody else is playing.”

Microsoft is now arguing that games on Xbox Game Pass see sales harmed.

A newly-published report from the UK’s Competition and Markets Authority into Microsoft’s proposed $99 million purchase of Activision Blizzard says Microsoft “recognises that adding titles to Game Pass would lead to cannibalisation of B2P [buy to play] sales.”

“Microsoft also submitted that its internal analysis shows a [percentage redacted] decline in base game sales twelve months following their addition on Game Pass.”

The CMA is pushing for Microsoft to sell Activision’s tentpole title Call Of Duty before it green lights the sale, so it’s possible that this narrative of lost sales has been spun by Microsoft, and Spencer’s 2018 comments were accurate.

Regulators in the US, Europe, and Australia are also probing the deal, so Microsoft have a long way to go before they can breathe easily.



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