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Xbox Game Pass subscriptions miss Microsoft’s target

Xbox Game Pass is often touted as the best deal in gaming and its subscriber count is a shorthand measure of Microsoft’s gaming success.

www.axios.com

Subscriber growth for Microsoft’s signature gaming service, Xbox Game Pass, was slower than the company hoped for in the past year, according to a new financial filing.

 

[Xaero Gravity]

Edit: I feel bad about the joke

 

[Exanthus]

Well when they missed the halo release last year it makes sense.

 

[Tiago Rodrigues]

I mean...as soon as i heard of them giving away Gamepass subscriptions for free in India for like 8 months it was kinda telling.
I wonder how much MS has invested on Gamepass so far.

 

[Vasto]

What are the sub numbers?

 

[AlexxKidd]

Strauss said "30 million" and Phil stayed mum. Now we see why. They know it's better to not report the numbers when they're not up to expectations (as they stopped doing for hardware sales years ago), than to put a less than desirable number out there.

I wonder if the "Game Pass has reached XXX subscribers" press releases will meet the same fate as the "Xbox sells XXX units" ones did.

 

[Magnific0giganticus]

So maybe not 30 million but...

 

[Elios83]

And here's why they stopped releasing numbers...typical Microsoft, if there's not a good story to tell just hide everything.
It will be interesting to see what happens when they release bigger titles like Halo Infinite on it.
It's not like they can act on price as a lever since they have already made tons of deals to push it almost for free.

 

[M1chl]

Time to invest big time Microsoft

 

[Exanthus]

And here's why they stopped releasing numbers...typical Microsoft, if there's not a good story to tell just hide everything.
It will be interesting to see what happens when they release bigger titles like Halo 5 on it.
It's not like they act on price as a lever since they have already made tons of deals to push it almost for free.

Halo 5...? What?

 

[Duchess]

And here's why they stopped releasing numbers...typical Microsoft, if there's not a good story to tell just hide everything.

Aye. They stopped sharing Xbox One sales after about 3 years when the sales were lower than expected.

It's not that Game Pass isn't growing, it says so in the article that it is, it's just that growth isn't as rapid as had been hoped.

 

[cromofo]

Get it to Steam and on the Switch and it'll explode.

Halo and Forza will also push the numbers up.

 

[haveagood1]

Only a 37% growth instead of 48% and Halo was delayed. I'm sure their freaking out in Redmond.

 

[Elios83]

Halo 5...? What?

Lol Infinite fixed

 

[cormack12]

Probably best to add the context to the OP:

By the numbers: For the 12 months that ended on June 30, Xbox Game Pass subscriber growth was up 37%, but the company had set a 48% growth goal.

Underperforming by 11% I guess. I still wish we had the numbers though just for my own curiosity really.

I always wonder what it looks month to month as well. Like do people unsub and resub or have lots done conversions of gold etc.

It's also June so that would mean the last official numbers of 18 million in Jan would fall into underperforming. And the delta of Jan-June needs adding. Percentages are so shit

 

[Kacho]

As someone who is heavily invested in the Xbox ecosystem I still don’t get the appeal of the service. What games have dropped that make me want to sub or lead to significant growth?

Marvel’s Avengers? Nah
Ascent? Nope
The Medium? Hell no
Baldur’s Gate? Lol

Even with Halo and FH5 on horizon it’s like who cares? Just buy the one or two games that interest you and play them. I’m not subbing to Game Pass to play Starfield for example. I’ll just buy it.

 

[ripeavocado]

Fantastic, the game pass model is bad for gamers, third party developers and the Xbox console. It’s only good for Microsoft and its investors.

let it fail.

until now growth was sustained with incredibly discounted subscriptions

 

[Syphon Filter]

Get it to Steam and on the Switch and it'll explode.

Halo and Forza will also push the numbers up.

makes zero sense to put it on steam, a service on a service?

 

[Tchu-Espresso]

Everyone here says it’s free?

 

[dotnotbot]

Numbers will surely blow up with Halo and Forza release but the real question is how many of those subs will stay after.

 

[StreetsofBeige]

I'm sure MS and gamers are shaking.

GP subs last year overachieved by 15% (86% vs 71%), MS stock is at $308 which at record highs, with a market cap of about $2.3 trillion, just below Apple at $2.4.

And Xbox gamers are getting endless GP games at dirt cheap GPU promo prices. Thanks MS for subsidizing gaming instead of charging $70 US per game ($90 cdn!).

 

[bentanchorbolt]

Probably best to add the context to the OP:

By the numbers: For the 12 months that ended on June 30, Xbox Game Pass subscriber growth was up 37%, but the company had set a 48% growth goal.

Underperforming by 11% I guess. I still wish we had the numbers though just for my own curiosity really.

I always wonder what it looks month to month as well. Like do people unsub and resub or have lots done conversions of gold etc.

It's also June so that would mean the last official numbers of 18 million in Jan would fall into underperforming. And the delta of Jan-June needs adding. Percentages are so shit

The service grew well but not as well as MS had hoped.

tOtAl FaIlUrE

 

[Hawking Radiation]

Oh well I love the service and I hope it continues to grow. There's just so much fucking value in it for such a low monthly fee.

Halo should give it a good shot in the arm as will Forza Horizon 5. Both titles I'm itching to play.

 

[Exanthus]

Fantastic, the game pass model is bad for gamers, third party developers and the Xbox console. It’s only good for Microsoft and its investors.

let it fail.

until now growth was sustained with incredibly discounted subscriptions

Oh not this tripe again

 

[TheBomb]

The service grew well but not as well as MS had hoped.

tOtAl FaIlUrE

I'm sure MS and gamers are shaking.

GP subs last year overachieved by 15% (86% vs 71%), MS stock is at $308 which at record highs, with a market cap of about $2.3 trillion, just below Apple at $2.4.

And Xbox gamers are getting endless GP games at dirt cheap GPU promo prices. Thanks MS for subsidizing gaming instead of charging $70 US per game ($90 cdn!).

They still need to make the green.

 

[ipukespiders]

Mine expired. I like the service, but I've got too much in my backlog right now. I'll probably jump on the next $1 deal.

 

[M1chl]

As someone who is heavily invested in the Xbox ecosystem I still don’t get the appeal of the service. What games have dropped that make me want to sub or lead to significant growth?

Marvel’s Avengers? Nah
Ascent? Nope
The Medium? Hell no
Baldur’s Gate? Lol

Even with Halo and FH5 on horizon it’s like who cares? Just buy the one or two games that interest you and play them. I’m not subbing to Game Pass to play Starfield for example. I’ll just buy it.

You mean that you can get ultimate for the price of this two games? I mean the appeal is there, because you try far more games than you normally would. I mean you do you obviously.

 

[Bonfires Down]

So 37% growth year over year and 15 million confirmed in september 2020. Let's say 14 million in June 2020 then which would make 20.5 million in june 2021 and maybe 22 million now. Yeah, I would have expected more too. But we'll see, the heavy hitters are still to come.

 

[octiny]

Still 37% growth after overachieving by 15% last year. Sounds like they are doing pretty good

December is going to do gangbusters for them

 

[HeisenbergFX4]

Oh well I love the service and I hope it continues to grow. There's just so much fucking value in it for such a low monthly fee.

Halo should give it a good shot in the arm as will Forza Horizon 5. Both titles I'm itching to play.

I also love gamepass and agree just wait until Halo and FH5 hits

 

[Kacho]

You mean that you can get ultimate for the price of this two games? I mean the appeal is there, because you try far more games than you normally would. I mean you do you obviously.

What good does that do most players who play maybe one or two games exclusively every few months that aren’t on the service? I know there’s an audience there, I just don’t think it’s a fairly big one.

 

[ripeavocado]

Oh not this tripe again

Yes instead, now more than ever.

Tell me, do you want to play less and worse games and have to rent them?

 

[AdjudicatorHead]

Probably best to add the context to the OP:

By the numbers: For the 12 months that ended on June 30, Xbox Game Pass subscriber growth was up 37%, but the company had set a 48% growth goal.

Underperforming by 11% I guess. I still wish we had the numbers though just for my own curiosity really.

I always wonder what it looks month to month as well. Like do people unsub and resub or have lots done conversions of gold etc.

It's also June so that would mean the last official numbers of 18 million in Jan would fall into underperforming. And the delta of Jan-June needs adding. Percentages are so shit

That's underperformance by 23%. If your target is 48% growth and you only had 37% growth, you missed your target by (48-37)/48 * 100 = ~23%.

 

[Magnific0giganticus]

As someone who is heavily invested in the Xbox ecosystem I still don’t get the appeal of the service. What games have dropped that make me want to sub or lead to significant growth?

Marvel’s Avengers? Nah
Ascent? Nope
The Medium? Hell no
Baldur’s Gate? Lol

Even with Halo and FH5 on horizon it’s like who cares? Just buy the one or two games that interest you and play them. I’m not subbing to Game Pass to play Starfield for example. I’ll just buy it.

 

[M1chl]

What good does that do most players who play maybe one or two games exclusively every few months that aren’t on the service? I know there’s an audience there, I just don’t think it’s a fairly big one.

Fair enough and I don't think you are right, but that's ok.

 

[StreetsofBeige]

They still need to make the green.

Not really.

Where does it say in the financials Game Pass is losing money?

Even if it does, every company has some losing money products, countered with big winners. LinkedIn cost MS $25 billion and has barely made any money. Sony kept it's TV division the whole time even during that stretch years back they were losing billions per year. And that was even when the company's financials werent in great shape. And they still kept it. It must had lost $10 billion over the years. Still around.

 

[TheBomb]

Not really.

Where does it say in the financials Game Pass is losing money?

Even if it does, every company has some losing money products, countered with big winners. LinkedIn cost MS $25 billion and has barely made any money. Sony kept it's TV division the whole time even during that stretch years back they were losing billions per year. And that was even when the company's financials werent in great shape. And they still kept it. It must had lost $10 billion over the years. Still around.

Yeah, but doesn't mean it's good for Microsoft.

 

[Hawking Radiation]

I also love gamepass and agree just wait until Halo and FH5 hits

Yeah Halo's going to be crazy day one.

Have fond memories of Halo 3 launch on 360. Multiplayer was absolutely packed with damn near every single one on my friends list playing the game. I really hope this Halo launch is like that. Xbox needs a big hit. I mean fuck this gen needs a bit hit. It's been a bit of a bore since the start.

 

[mejin]

Growth is all about stopping to bleed money.

But It really doesn't matter cause mother MS is banking everything.

 

[SafeOrAlone]

It's a great service, but people get excited about new games. Then the backlog helps entice them to stay.

 

[Dr Bass]

I'm sure MS and gamers are shaking.

GP subs last year overachieved by 15% (86% vs 71%), MS stock is at $308 which at record highs, with a market cap of about $2.3 trillion, just below Apple at $2.4.

And Xbox gamers are getting endless GP games at dirt cheap GPU promo prices. Thanks MS for subsidizing gaming instead of charging $70 US per game ($90 cdn!).

The MS Stock and market cap are a result of their other offerings, not their gaming division.

Lower than expected subscriber counts and buying up a crapload of expensive studios don't really go hand in hand, and that's one of the things I've been saying for awhile. It's not going to be good for gamers in the long term, though as you put it you are getting "endless" GP games at "dirt cheap" prices. I'm not sure where the disconnect is in seeing that that is not a good thing.

I just don't think there is is this treasure trove of undiscovered gamers out there that want an Xbox gaming subscription that hasn't already bought into the Xbox ecosystem. iOS and Android users aren't going to sign up to GP so they can play Starfield on their phones. It's just not going to be a thing. So if growth is already slowing a higher degree than expected, that doesn't seem great. Probably not going anywhere for awhile, but I personally think this direction was entirely expected to anyone who tried to think this through.

 

[Hitchyhero]

Why is their so much thirst on gaf for Gamepass to fail

 

[sendit]

Time for another year of $1 gamepass subs? Do it Microsoft! I avoided paying full price for hot trash like Scarlet Nexus thanks to Gamepass.

 

[abacab driver]

I love how people believe there's a world where every gamer has played or owns every game, has no interest in playing anything else, has no backlog with any games in gamepass and isnt looking forward to any of Xboxs 1st party offerings.

 

[cormack12]

That's underperformance by 23%. If your target is 48% growth and you only had 37% growth, you missed your target by (48-37)/48 * 100 = ~23%.

Oh yeah, I stand by my original quote

Percentages are so shit

 

[kyoji]

Im not sure why people thought the “30” million number was legit, I always took it as the take two ceo taking a light hearted jab at phil, considering the whole context of the conversation and how he brought it up. But i read into that conversation differently than most, body language etc .

 

[Bryank75]

• Just today it announced 11 more notable releases for the service for this month alone.

Very interesting.

 

[StreetsofBeige]

The MS Stock and market cap are a result of their other offerings, not their gaming division.

Lower than expected subscriber counts and buying up a crapload of expensive studios don't really go hand in hand, and that's one of the things I've been saying for awhile. It's not going to be good for gamers in the long term, though as you put it you are getting "endless" GP games at "dirt cheap" prices. I'm not sure where the disconnect is in seeing that that is not a good thing.

I just don't think there is is this treasure trove of undiscovered gamers out there that want an Xbox gaming subscription that hasn't already bought into the Xbox ecosystem. iOS and Android users aren't going to sign up to GP so they can play Starfield on their phones. It's just not going to be a thing. So if growth is already slowing a higher degree than expected, that doesn't seem great. Probably not going anywhere for awhile, but I personally think this direction was entirely expected to anyone who tried to think this through.

MS's giant coffers is why Xbox is still here with Series S, X, Gamepass and tons of studios (and still buying).

If MS was a broke tech company, they would had stopped after Xbox OG 15-20 years ago.

Corporate coffers go a long way.

My company has sold dead weight products for over 10 years that lose money half the time. And some years we squeak out a killer 5% margin. But you sacrifice that in order to get the sales and profits from other parts of the business which can be anywhere from 30-70%.

I hope you guys all know all the cheap milk and cheese you buy at stores nobody makes money on. But they all sell it for cheap to get you in so you can buy all the other stuff. The money is made on higher priced products in the category.

 

[octiny]

Why is their so much thirst on gaf for Gamepass to fail

Because it's succeeding, even without the yet to be released heavy hitters from all their game studios. If you're not charging $70 a game, you're doing it wrong.

• Just today it announced 11 more notable releases for the service for this month alone.

Follow that link and try not to laugh!

Age of Empires, can't wait!

 

[SlimySnake]

Everyone from Disney to HBO and Netflix releases sub numbers. MS needs to do the same.

I get that no one wants to admit to doing poorly at the box office or NPD, but come on, you gotta show the numbers no matter what.