LogInAccording to a new financial filing, Microsoft targeted the Xbox Game Pass growth rate of 73% for the fiscal year 2022, however, the service managed to achieve only 28% growth.
Subscriber growth of Microsoft's Xbox Game Pass fell short of the company's expectations, according to financial filings obtained by Axios. The filings read that the company had targeted the subscription service's growth rate of 73% for the fiscal year 2022, which ran from July 1, 2021 to June 30, 2022.
Xbox Game Pass grants its users access to a number of games at a monthly fee, including new releases (unlike PlayStation Plus which doesn't make games available on Day 1 in the subscription), which may be considered the advantage of the service.
The fiscal year 2022 saw one of Microsoft’s most-hyped games, Halo Infinite, which appeared on Game Pass on the first day of its release, which is why the company apparently assumed the 73% growth was a pretty realistic goal. However, Xbox Game Pass managed to grow by only 28%.
As noted by Axios, FY2022 was the second year in a row when the subscription service failed to hit targets. In the fiscal year 2021, Game Pass grew by 37%, while the 48% growth was initially expected.
Previously, Xbox head Phil Spencer attached great importance to Xbox Game Pass whenever he spoke making it seem even more important to Microsoft’s future than Xbox consoles themselves. However, at a recent Wall Street Journal tech conference, Spencer said that Game Pass accounts for around 15% of gaming revenues for the company, noting that it would never get "bigger than that."
"I think the overall revenue grows so 15 percent of a bigger number, but we don’t have this future where I think 50–70 percent of our revenue comes from subscriptions," Spencer said.
This change of tone may probably be attributed to the fact that the UK's Competition and Markets Authority, which is currently investigating Microsoft's proposed acquisition of Activision Blizzard, cited Game Pass as a point of concern regarding whether it will approve the deal.
The CMA noted that if Microsoft puts the Call of Duty games – which are usually the best or second-best-selling games every year – on Game Pass, the service might become irresistible and lessen the competition on the market.
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