Axios: Microsoft misses Xbox Game Pass subscriber target for second year

[Bryank75]

https://www.axios.com/2022/10/27/microsoft-xbox-game-pass-miss

This is information based on a new financial filing from Microsoft. Yesterday, at the WSJ conference, Phil Spencer had stated that Game pass was profitable, but that growth was slowing on console.

• Game Pass achieved 28% growth for the fiscal year ending June 30, 2022, but the target was 73% growth rate. This fell short of a target tied to the pay of CEO Satya Nadella and other top executives. This is the second year in a row Game Pass has missed the growth target (37% actual vs 48% goal), having exceeded the target in 2020 (86% actual vs 71% goal).
• Microsoft wasn't specific about actual subscriber target counts (i.e. the non-executive pay target), but claimed delivery of "over 25 million Game Pass subscriptions."
• The success of Game Pass is pertinent to the Activision deal, as the UK's Competition & Markets Authority has suggested that if Microsoft puts Call of Duty on Game Pass, there could be "substantial lessening of competition" in "multi-game subscription services." Microsoft denies that putting Call of Duty on Game Pass would require blocking the deal, arguing that PlayStation could put better exclusives on its own subscription service or even offer Game Pass on PlayStation.

So to emphasize, the 73% number is for an executive pay bonus. We do not know what the actual subscriber target is. (Credit: Resetera)

 

[Remember_Spinal]

Always music to my ears.

 

[DonFerrari]

Not surprising, they have had jack shit in terms of mass appeal first party games in 2022. Horizon was big last year, Halo should have been, but 343’s incompetence assured the MP had no legs.

2023 starts off with Redfall, Forza, and Starfield. 2022 actually ends with Somerville and Pentiment, which should both be great but not really mass appeal.

 

[Sircaw]

Why do they set their expectations so high, nothing wrong with being more realistic than shooting for the moon.

Is it to generate interest or something?

 

[riesgoyfortuna]

Not surprising, they have had jack shit in terms of mass appeal first party games in 2022. Horizon was big last year, Halo should have been, but 343’s incompetence assured the MP had no legs.

2023 starts off with Redfall, Forza, and Starfield. 2022 actually ends with Somerville and Pentiment, which should both be great but not really mass appeal.

ms fiscal includes halo and forza homie...juli 2021 to june 2022

 

[thicc_girls_are_teh_best]

It's not like GamePass matters much to Satya's salary anyway...it's like 5% is tied to them hitting a certain "record best" GamePass growth bonus. I think they can live without that 5% considering how much their salary is in general

Apparently they're getting a ton of growth for GP on PC, but that doesn't really mean much probably. PC GamePass had piss-all in terms of sub counts anyway, but I'd suspect any notable growth has come from stuff like the Riot Games bonuses and maybe due to the fact PC GamePass actually gets some timed 1P exclusives like Flight Sim and Age of Empires.

ms fiscal includes halo and forza homie...juli 2021 to june 2022

Not surprised that Halo Infinite underperformed all around. In sales, in MTX, in growing sub counts...the game is just an outright failure. Only saving grace is the gunplay physics & mechanics which can serve as a good base for a future Halo game that doesn't completely screw up.

 

[DonFerrari]

ms fiscal includes halo and forza homie...juli 2021 to june 2022

Yes, which is why I listed them, homie.

 

[Yobo]

Why do they set their expectations so high, nothing wrong with being more realistic than shooting for the moon.

Is it to generate interest or something?

Cause they don't know what they are doing top to bottom. This has been shown the past 20 years

 

[Bodycount611]

not looking good for xbox unfortunately. with all their eggs in the GP basket, this is really bad news. especially when execs like Satya aren't making their bonuses - heads will roll.

dark days ahead for xbox.

 

[ChorizoPicozo]

This is huge. And contradict Phil Spencer's "GP is profitable".

 

[riesgoyfortuna]

Yes, which is why I listed them, homie.

Calm my sweet summer Child, i know inside u are pretty upset about this news, dont worry thats life for you

 

[riesgoyfortuna]

So with heavy hitters like halo, forza, flight sim,psychonauts 2,etc they are Still way way down of expectations every year, lol i can sense a lot of green rats doing damage control like there is now tomorrow

 

[PropellerEar]

Best deal no body wants?
...and definitely don't want to pay for.

 

[Dabaus]

So what happens next year when they increase the price? We all assume it will be something like a 5 dollar increase but what if it’s more? What if gamepass shoots up to 25 dollars a month? And what about the hardware? Will the series s still be allowed in to bleed money or do they increase that to 349 or 399? And what about the x, 599? The Xbox division has been given a very long leash and continues to under deliver. At what point do investors want their money back?

I could see a world where they cancel Xbox live gold and bump up gamepass the $60 a month and pitch it as the price of one game a month so you can play 250.

 

[Dr Bass]

So what happens next year when they increase the price? We all assume it will be something like a 5 dollar increase but what if it’s more? What if gamepass shoots up to 25 dollars a month? And what about the hardware? Will the series s still be allowed in to bleed money or do they increase that to 349 or 399? And what about the x, 599? The Xbox division has been given a very long leash and continues to under deliver. At what point do investors want their money back?

I could see a world where they cancel Xbox live gold and bump up gamepass the $60 a month and pitch it as the price of one game a month so you can play 250.

They wouldn't raise the price that much. I would expect one-two dollars a month.

But I would expect them to raise the price every year or two as well.

 

[MScarpa]

Well shit, I better unsub and stop enjoying these subscription models. So Pitiful, Stupid MS and Sony.

 

[MScarpa]

So what happens next year when they increase the price? We all assume it will be something like a 5 dollar increase but what if it’s more? What if gamepass shoots up to 25 dollars a month? And what about the hardware? Will the series s still be allowed in to bleed money or do they increase that to 349 or 399? And what about the x, 599? The Xbox division has been given a very long leash and continues to under deliver. At what point do investors want their money back?

I could see a world where they cancel Xbox live gold and bump up gamepass the $60 a month and pitch it as the price of one game a month so you can play 250.

60$ a month? HAHAH That is hilarious man. Your takes are awesome. What else ya got??

 

[Dabaus]

60$ a month? HAHAH That is hilarious man. Your takes are awesome. What else ya got??

They tried to double Xbox live gold just this year. Anything’s possible. Microsoft’s stock is tanking (as is everyone else’s) because of a global recession. They don’t want to bleed money on the Xbox division forever. And if you’re going to troll me at least get an avatar picture so I can see you and put you on ignore.

 

[DonFerrari]

Calm my sweet summer Child, i know inside u are pretty upset about this news, dont worry thats life for you

I’m perfectly calm, homie. Just correcting your poor reading comprehension.

Maybe they planned for 70% growth or whatever before 2022 saw so many delays .

 

[Hezekiah]

Xbox growth has stalled, and I can't see PC gamers ever subbing in large numbers.

The other thing that's probably dawning on them is that hardly anybody gives a shit about x-Cloud.

A lot of pressure on their shoulders next year - and Redfall isn't going to bring a large uptick, and I expect Starfield to be delayed until the end of the year.