Microsoft says Xbox subscription harms sales

Microsoft has confirmed that releasing new games on its Xbox Game Pass subscription service has an adverse effect on sales.

A report from the UK’s competition regulator has shown Microsoft confirming that releasing new games on its Xbox subscription service has an adverse effect on overall sales for the games.

The provisional report from the UK Competition and Markets Authority (CMA) detailing Microsoft’s attempt to acquire game publisher Activision Blizzard included submissions from Microsoft about the state of the businesses and the industry.

One such submission reportedly had Microsoft confirming that games added to its Xbox Game Pass subscription service typically see a reduction in sales after being added to the service.

“Microsoft also submitted that its internal analysis shows a [redacted]% decline in base game sales twelve months following their addition to Game Pass,” reads the report.

Xbox Game Pass includes new and classic games, like the Nintendo 64 hit GoldenEye 007. Picture: Microsoft

While this is true for big, popular games, it’s less likely to be true for more niche titles. Hi-Fi Rush became an instant hit last month when it was added to Game Pass after a surprise announcement during an Xbox stream, and would likely not have attracted quite as much attention if it hadn’t been available at no extra cost to subscribers on the same day.

The revelation does, however, run counter to a statement made by Xbox head Phil Spencer in 2018, when he said that the service actually increases sales for included titles.

“When you put a game like Forza Horizon 4 on Game Pass, you instantly have more players of the game, which is actually leading to more sales of the game,” Spencer said at the time, “Some people have questioned that, but when State of Decay 2 launched, you saw if you looked in the US at the NPD you saw this game selling really well the month it launched on Game Pass”.

Hi-Fi Rush quickly became one of the most popular games on Game Pass. Picture: Bethesda

The CMA report comes at a time of strife for the acquisition, as the UK regulator said that the $100 billion deal harms gamers. The CMA says that Microsoft has an incentive to make games like Call of Duty exclusive to its Xbox consoles, or to make the games available on PlayStation consoles in “materially worse conditions”.

Microsoft disputed these claims, instead saying that the company was “committed to offering effective and easily enforceable solutions that address the CMA’s concerns”.

Written by Oliver Brandt on behalf of GLHF.