Although Xbox Game Pass today seems “profitable” according to Phil Spencer, Microsoft is not meeting its internal growth targets for the second time in a row.
The number of Xbox Game Pass subscribers is not increasing as fast as Microsoft expects, while the company is betting heavily on this business model.
Xbox Game Pass under 30 million subscribers
Although it represents a good portion of Microsoft’s gaming revenue, Xbox Game Pass is experiencing a slowdown in its subscriptions, especially on consoles as revealed by Axios.
We’re seeing incredible growth on PC and on consoles, a slowdown. Mainly because at some point you have reached the number of people who want to subscribe to this medium.
Xbox boss Phil Spencer, via WSJTECH (and The edge).
But more than that, the Redmond company is missing its growth targets by a long shot. For its last financial year, the company was hoping for an increase of 72.88%, and it was only 28.07%. This is the second year in a row that Microsoft has missed its forecast. Xbox Game Pass has therefore apparently still not passed the 30 million subscribers and is between 25 and 30.
In 2021, the targets were more modest with an estimated growth of 47.79% to finally reach 37.48%. As noted by Phil Spencer, the service cap on consoles may already be there. Thus, we understand much better why the manufacturer would like to see XGP on PS5 and Nintendo Switch. The absence of first party game exclusives that make people want to subscribe is potentially another reason, although big third-party titles like A Plague Tale Requiem have arrived to bolster the offering.
According to the Xbox boss, Game Pass should still make up 10-15% of Microsoft’s game revenue, which suits the company. Anyway, all is well for the green team, who are showing very good health in the video game.