Xbox Game Pass Unlikely to Top 10 to 15 Percent of Microsoft Gaming Business Says Spencer

Nathan Birch
Phil Spencer Xbox Game Pass

For some time now, Phil Spencer has been beating the Xbox Game Pass drum as hard as possible. It really seemed like Game Pass was seen as the future of Xbox, with Spencer making bold statements about focusing on a hardware-agnostic future rather than console sales. Spencer has also been quite up front about the fact that many of their recent studio acquisitions were made to provide content for Game Pass.

Well, it seems like somewhere along the line, something changed, or perhaps reality has just come knocking. In a statement to UK regulators scrutinizing Microsoft’s proposed acquisition of Activision Blizzard, the company downplayed the importance of cloud gaming, a much-hyped recent Game Pass feature. And now, in a new Wall Street Journal Tech Live interview, Spencer seems to admit the whole Game Pass concept has a ceiling (thanks to The Verge’s Tom Warren for the transcription).

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“I think [Game Pass] will stay in that 10 to 15 percent of our overall revenue, and it's profitable for us. We're seeing incredible growth on PC... on console I've seen growth slow down, mainly because at some point you've reached everybody on console that wants to subscribe.”

With hardware sales up nicely now that Xbox Series X and S consoles are actually making it shelves, could Phil Spencer’s years of visionary Game Pass talk not end up amounting to that much? In the end, will Microsoft end up remaining largely a boring old traditional console maker? Spencer says he sees free-to-play as the fastest-growing gaming model, but the company doesn’t really seem to be investing in that. Spencer has also admitted a Game Pass price increase may be coming in the future, perhaps indicating he sees the service’s period of aggressive growth tailing off.

Of course, some conspiratorial minds may say Spencer is just playing down Game Pass to push the Activision deal through, but he could do that without providing such specific figures. These statements from Spencer feel honest to me.

What do you think? Is the subscription model going to remain an outlier in the gaming space? Or will Game Pass pay off for Microsoft eventually?

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