Xbox Game Pass It’s a service that’s too good to be true. Several analysts have long made it clear that Microsoft would actually be losing money on this platform. Well, a new report ensures that, in the long term, Game Pass may not be sustainable for the company.
DFC Intelligence recently published an analysis of the different subscription services offered by the big three companies in the industry. Here it is mentioned that The best model is that of Nintendo Switch Online, since it invests little, and generates a lot with its 30 million users.. For its part, Sony is also profitable thanks to its 40 million players on PlayStation Plus. However, Xbox Game Pass is not as successful.
The analysis has pointed out that the biggest difference with Game Pass is that this service has become the objective of Xbox, and not an addition for users. Since the last few years, everything revolves around this subscription. Although this platform generates up to three times more revenue than Switch Online, it has not been able to improve the company’s numbers, and they have even stagnated in recent months.
DFC Intelligence has pointed out that Xbox Game Pass is not a good model, and in the long term it could negatively affect the company. The only way it would be viable is if it will have 100,000 users., something that not even the purchase of Activision Blizzard would achieve. This was what was discussed:
“When you do the math, Game Pass is generating probably 3 times the revenue of Nintendo Switch Online and probably comes close to matching the revenue of PlayStation Plus because it comes at a higher price. However, Microsoft is giving away a lot to generate that revenue and it doesn’t seem like a sustainable business model in the long run. Of course, if Game Pass could somehow get 100 million subscribers, the economics would change, but that’s a big assumption, because even if Activision Blizzard’s user numbers are added (minus mobile users), the numbers stay. very short. A top-of-the-line Call of Duty can only hit 30 million units and Blizzard’s monthly active users have been around 30 million for years.”
While analysts have pointed out that Microsoft’s deep pockets have been able to absorb the losses from Xbox Game Pass, this wouldn’t be forever. We can only wait and see how the company will react. On related topics, multiple games will be removed from the Xbox 360 store. Similarly, the price of the Xbox Series X|S will increase in Japan.
Xbox Game Pass is a great service for users, there is no doubt about that. However, as a model that has become the mainstay of the company, it doesn’t do very well to generate the large amounts of money one might expect.
Via: DFC Intelligence