Microsoft may close Xbox if Game Pass doesn’t grow by 2027

Although Microsoft even has plans for the next generation of Xbox, its presence in the gaming market is not guaranteed forever. At a hearing for the FTC, brand boss Phil Spencer confessed that Microsoft may exit the gaming segment if Game Pass does not grow enough by 2027.

Spencer’s comment was regarding the growth projection for Game Pass (console, PC and streaming) disclosed in one of the documents released this Tuesday (19). He explains: “I can guarantee that if we didn’t make more progress than that outside of the console, we would get out of the games business. If that was the outcome, we would get out… I don’t believe we would be in business.”

In the document released by Microsoft, the expectation is that the Xbox will reach 100 million subscribers between 2029 and 2030.Fonte:  WCCFTech

Spencer comments on the expectation that Game Pass will reach 100 million subscribers by 2030: “So when you asked me if I agreed with this light green and blue graphic, depending on the colors you see, they would have to be much better much sooner, I would say by the 2026/2027 fiscal year we would be in this position, or we would have to make a different business decision”, he added.

For Microsoft, maintaining the growth of its cloud gaming and mobile platforms is one of the main reasons for acquiring Activision Blizzard. This was one of the reasons given by the company in defense in the United Kingdom.

Game Pass costs Microsoft millions

Microsoft does not go into detail about the company’s budget limits, but recently revealed documents show that Game Pass costs millions to maintain. To add the Star Wars: Jedi Survivor for the catalogue, for example, the company expected to pay US$300 million (or R$1.45 billion). The games Mortal Kombat 1 e Suicide Squad they would also cost US$250 million each (around R$1.2 billion).

Microsoft expected to pay $300 million to add Star Wars: Jedi Survivor to the Game Pass catalog.Font: EA

In the document, each game was listed along with its likelihood of being accepted into Game Pass, its “wow factor,” and a “budget expectation” in dollars. Check out the full list:

• Lego Star Wars: US$35 million
• Dying Light 2: US$50 million
• Red Dead Redemption II: US$5 million
• Dragon Ball: The Breakers: US$20 million
• Just Dance: US$5 million
• Let’s Sing Abba: US$5 million
• Return to Monkey Island: US$5 million
• Wreckfest 2: US$10-14 million
• Baldur’s Gate 3: US$5 million
• Gotham Knights: US$50 million
• Assassin’s Creed Mirage: US$ 100 million
• Grand Theft Auto V: US$12-15 million

From the list, Return to Monkey Island, GTA V e Gotham Knights are (or will arrive) in the Game Pass catalog, but the expected value is not necessarily what Microsoft paid to guarantee them.

Most pay full price for Game Pass

Game Pass offers a series of promotions to reach more users, including options with a reduced initial cost. However, most consumers pay the full price for the service, according to a document revealed by Microsoft.

At the end of the presentation, the company revealed that in April 2022 it had 33.6 million subscriptions to its Xbox consoles, 21.9 million of which were on Game Pass (without PC) and 11.7 million on Xbox Live Gold.

Microsoft showed that net revenue per subscription was US$9.26, a value very close to the US$9.99 charged for the standard subscription in the United States. Therefore, most subscribers pay the full price of the service.

Game Pass has room to grow

Even though Microsoft expects considerable growth in less than a decade, Game Pass still has a lot of room to grow. Recently, the giant replaced Xbox Live Gold with Game Pass Core, a “cheap” version of the subscription service.

The debut of Game Pass Core must have migrated millions of users to the platform.Source: Microsoft

The numbers broken down in the document do not show how users converted from Xbox Live Gold to Game Pass Core, but the transition certainly migrated millions of players.

So, do you believe that Game Pass can increase the number of subscribers by 2030? Tell us on social media Voxel!