Does Xbox Game Pass affect sales of video games?

Statements that Microsoft has made for UK regulators – in an attempt to save it proposed to buy back 68.7 billion USD by Activision Blizzard – contradicting what the company has said for years about Xbox Game Pass. Specifically, having the game appear on a subscription service will lead to lower sales.

This comment was made in a report filed last week with the UK’s Competition and Markets Authority (and first reported by GamesIndustry.biz). “Microsoft also submitted that its internal analysis revealed a [redacted]% of base game sales declined in the 12 months after they were added to Game Pass,” CMA said in its report.

From at least 2018and through Xbox officials all the way down to the division chief, Phil Spencer, the company advertised Game Pass as a sales boon for third parties to include their games in the company’s library.

In the most commonly quoted quote, Spencer said in a 2018 interview with LevelUp that the increased player base that Xbox Game Pass has attracted Forza Horizon 4 on launch day “actually leads to more game sales.” He added that Decay 2, another Game Pass launch title, “sold very well in the month it launched in Game Pass,” according to retail sales data from the NPD Group.

But Microsoft apparently told the UK CMA that Activision itself has been reluctant to put its games on Xbox Game Pass or any subscription service, believing doing so would “seriously corrode”. [buy-to-play] sales, especially in the case of newer releases.

Image: Playground games/Xbox Game Studios

The individual interests in opposing positions are clear: On the one hand, Microsoft wants third-party developers and publishers to see participating in Game Pass as a big boon for their games. On the other hand, the company is arguing with the regulator that bringing Activision’s games to Game Pass as a first-party publisher will not disrupt the market or eliminate competition.

Polygon reached out to an Xbox representative with a number of questions to bolster Microsoft’s public stance with its CMA testimony. The spokesperson responded with a statement that has appeared in other reports since the GamesIndustry.biz story.

“Every game is unique, so we work closely with creators to build a custom program that reflects what they need, ensuring they are compensated with their resources,” said a spokesperson. key when engaging in service and facilitating creativity and innovation”. “As a result, the number of developers interested in partnering with Game Pass continues to grow.”

That could mean two things being true at once: Titles on Game Pass could suffer a drop in sales, and being in the library could still be a great deal for a publisher. and developers, in terms of additional compensation, exposure, access to a large player base (for multiplayer titles), and sales by category. And it’s likely that Call of Duty is so big that Activision doesn’t see any real benefit in that.

Microsoft has talked about these additional benefits, not necessarily selling them, in the past. In 2018, Matt Percy, then Game Pass’s business development manager, confirmed with Polygon that Game Pass pushed players — and therefore buyers — to dig deeper into the game franchises that appeared in the catalog. As evidence, Microsoft solicited comments from Pete Hines, whom Bethesda Softworks was not owned by the company at the time. In 2019, Percy also told the Sydney Morning Herald that “on average, we saw a 25% increase in franchise pre-orders and a 10% increase in franchise sales coming from games included in Game Pass.”

For Microsoft’s own games, in 2019, 5 . gear At the time it was the biggest game launch in Game Pass history and Microsoft was clearly satisfied with audience growth and the attention that the game launched extends through the shooter franchise. “During its lifetime, 40% gears of war 4 players tried the game for the first time through Xbox Game Pass,” Ben Decker, then Percy’s predecessor, told Polygon. “We saw that interaction, we saw that discovery build over time through the Gears portfolio, and then we really saw it come to fruition with the launch of Gear 5.”

We asked Microsoft if their statement to the CMA was relevant to all games listed on Game Pass, or was it about a smaller niche, such as the company’s own first-party games. or games that launch daily on the service. We did not get an answer there. But if Microsoft is talking about all the games that are available to Game Pass subscribers, many of them appear in the library monthly, if not annually, after they initially launch. — when maintaining their unit sales is of little concern to their respective publishers.

But the benefits and limitations of Game Pass for publishers may not be a primary concern for UK regulators. In January 2018, with Xbox Game Pass six months later, some retailers told GamesIndustry.biz that Game Pass made their Xbox business “worthless overnight”.

“We can also go where we are supported, which is Sony,” one store owner said at the time.