One of Microsoft’s selling points is its Xbox Game Pass subscription system. Players will then be able to play games they already have on their system without having to pay for additional purchases, making the Xbox unique and one-of-a-kind that the game is launched on Game Pass.
However, the Xbox Game Pass subscription system has reportedly seen only a slight increase in revenue over the past two years, based on survey revenue in the US. This may be the reason behind Microsoft shutting down its game publisher and laying off many employees recently.
“Fan spending on subscriptions to non-smart video game services in 2024 is up just 1% compared to the same period last year,” said Matt Piscatella, a video game industry analyst. He also said that revenue in 2023 is up just 2% from 2022.
As a result, revenue from PlayStation Plus, EA Play, and Xbox Game Pass services has seen very low growth. But a giant like Microsoft has invested a lot of money to push Xbox Game Pass, especially through its acquisition of Activision Blizzard and its promise to bring the company’s popular games to Game Pass on the first day of sale now.
With Xbox's strategy, even though gamers are more interested in subscribing to Xbox Game Pass, having to sacrifice games like the launch of “Hi-Fi Rush” on the Game Pass service could result in generating revenue that is not worth the capital spent on building it and the fact that it was not able to generate additional revenue as much as the label intended may be a premature decision to push subscription services in this era.
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