Why Has Microsoft Put Xbox Game Pass Subscription Numbers In A Black Box?

Eight years ago, back in 2015, Microsoft decided it would stop reporting exact hardware sales numbers for Xbox. This was two years into the Xbox One generation where unlike the 360/PS3 generation, it had fallen precipitously behind PlayStation after a rocky launch.

But Microsoft’s position was that it cared more about the Xbox ecosystem, and it would still report things like overall Xbox revenue, of course. Its eyes were on subscriptions, the cloud and things well beyond just one box.

Now in 2023, that remains true, but now Microsoft has decided to quietly stop reporting numbers for its new driver of growth, Xbox Game Pass. Microsoft was very happy to report about huge surges in Game Pass subscriptions during the pandemic. Everyone on lockdown with often little to do but play video games boosted the entire industry, and Game Pass with it, which offered a whole lot of games for relatively cheap.

But now, it has been nearly two years since Microsoft officially reported Xbox Game Pass subscriber numbers. In January 2022 Microsoft said Game Pass had 25 million subscribers. We only got a hint at the 30 million milestone in September of this year when a single LinkedIn profile of an Xbox Marketing Director said it was 30 million for a brief time, before it was changed to 25. Hardly official. Now, we’re about two months away from January 2024 with no new figures.

This entire issue came to mind when it was just announced that Microsoft CEO Satya Nadella would no longer have a Game Pass growth target tied to his compensation, something that had happened in the previous three years. Axios first spotted the change in an SEC filing. There is still an overall Xbox target, but the recent report said the 4.4% growth target was met with the reality of just 0.7% growth instead. As for Game Pass, last year, Microsoft wanted 73% Game Pass subscriber growth. Instead it was 28%.

It is a little hard not to go Occam’s Razor here and deduce that Microsoft is now no longer reporting Xbox Game Pass subs because they have slowed way, way down from their previous hyper-growth, and they don’t want to reveal that publicly. Even if that 30 million milestone is real, they may be waiting until they hit a higher one to reveal more, if the gap between 25 and 30 million seems to have taken an oddly long time.

What might they be waiting for? Well, that could be a surge of new, attractive games on Game Pass. This has now begun this fall with the release of Bethesda’s Starfield, likely to be one of Microsoft’s highest profile exclusive games of the generation. Starfield may not be winning Game of the Year like past Bethesda titles, but its playercount numbers on both Xbox and Steam have been extremely solid, and Game Pass integration allowed them to boast it was Bethesda’s biggest launch ever.

Now, after this, we know a lot more big games are coming, most of which are from Microsoft’s acquired studios. I have to believe that Microsoft is waiting to see, for instance, how much of a driver Call of Duty coming to Game Pass will be for subscriptions, even if that’s not happening for at least another year, and not with this year’s Modern Warfare 3.

Update: I also forgot another factor, that Microsoft is about to rebrand Xbox Live Gold to Game Pass Core which would “increase” Game Pass subs by tens of millions instantly, albeit in name only, so that may be a big banner headline they want to roll out.

I’m not sure Microsoft’s stated non-reliance on the Xbox as a physical unit is panning out the way they expected. Xbox Game Pass is a very good deal for consumers and allows games to have large playerbases they might not have otherwise with full-priced sales. But there also would appear to be a ceiling on growth here, as at a certain point, most people who are going to buy Game Pass or not have already made up their mind, and it’s not clear if some specific title would change their mind.

Getting someone to sign up for Game Pass is not as easy as getting someone to sign up for some sort of video streaming service like Netflix. Breaking into the core gaming ecosystem if you’re not in it already is a tougher sell. Game Pass is about 1% the total of Netflix subscribers as we speak, and the service is now 6 years old.

The other part of this we haven’t talked about at all, the cloud, which Microsoft itself had to admit as part of its acquisition case was a small sliver of the industry and it remains extremely nascent and underdeveloped compared to more traditional avenues of play. It’s not clear when that changes, and it may not change unless the tech dramatically improves or say, the entire infrastructure of the internet gets better.

Xbox is not in “trouble,” but I do not believe they are growing at the pace they want to. They have ceded the console space to PlayStation mostly, understanding that they will now be far behind in sales (to Nintendo, as well) indefinitely. But now they’re running into limits with Game Pass and we’ll have to see if a slew of higher profile games change that, perhaps kicking off with the already-released Starfield. I’m mainly just wondering when or if we ever get official subscriber numbers again.

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