Xbox Game Pass falls short of Microsoft’s growth expectations, and the reason is clear to everyone

In spite of Xbox Game Pass has not stopped growing since its inception in 2017, and that today it is the best gaming service in the industry, not all that glitters is gold. This week, during Microsoft’s financial report for the first fiscal quarter of 2023, some information about the current status of the subscription was revealed. The data, by the way, is not positive for Redmond.

Microsoft reported that For the second year in a row, Xbox Game Pass failed to meet growth expectations. By fiscal year 2022, the company aims to increase its services—in terms of new subscribers—by 73%. However, it was very far from the final percentage: 28%. That is less than half of what they had in mind.

This is bad? Well, it depends on the point of view from which you look at it. While Xbox Game Pass hasn’t stopped its growth, it hasn’t done so at the rate that Microsoft hoped it would. The problem is that when much of the identity of the Xbox platform is centered on the value proposition of said subscription.Failure to meet financial expectations is never good news.

Phil Spencer, head of Xbox, stated (via Tom Warren) that these numbers may represent themselves, because they have already reached the majority of users who intend to subscribe to Xbox Game Pass. Fortunately, the panorama on PC is quite the opposite, as the service on this platform has grown exponentially.

“We are seeing incredible growth on PC. On consoles, I noticed a slowdown in growth, mainly because at some point you reached all the console users who want to subscribe.

Despite all of the above, Microsoft says Xbox Game Pass is profitable. In fact, this represents roughly 15% of the video game division’s total revenue.

Microsoft needs more AAA exclusives to improve its service

Xbox Game Pass, waiting for a possible price increase

This week we inform you that Microsoft finds it difficult to maintain current prices for consoles and Xbox services. A few weeks ago, taking advantage of the fact that Sony announced a rise in the cost of PS5 almost everywhere in the world, Redmond representatives said they were not considering such a move. However, the discourse has changed.

“We kept the prices of our console, we kept the prices of the games…and our subscription. I don’t think we can do this forever. I think at some point we will have to raise some prices for certain things,” said Phil Spencer.

The good news is that if there is an increase, It won’t be until the Christmas season. “I think at some point we will have to raise prices on some things, but in the run-up to the holidays [de fin de año] We felt it was important to keep prices high,” he added. If the price increase does happen, it will be interesting to see how much it will affect the growth of Xbox Game Pass next year.