- The decision to release AAA first-party titles day one on Game Pass has received internal criticism at Microsoft.
- The company thinks this strategy is hurting revenue and cannibalising sales.
- Many at Microsoft have opposed this move, saying it’s more profitable for the players.
Xbox has once again become the centerpiece of industry drama after laying off over 3,000 employees and gutting almost every studio under its wing. Multiple developers owned by the company have gone independent, while AAA studios like Obsidian and id Software have lost a sizable amount of staff to make up for losses.
Game Pass has come under renewed scrutiny following the job cuts, with Asha Sharma admitting that the service did not add meaningful growth to Xbox. As it turns out, Game Pass has become even more controversial internally, as Microsoft doesn’t like one of its hallmark features.
Why it matters: Analysts and developers have been reiterating that Game Pass does cannibalise sales to a sizable extent. Microsoft realising this so late is a failure on its end.
As reported by Bloomberg, Microsoft internally criticised the decision to release first-party AAA games on Xbox Game Pass on day one at no extra cost. Former employees working at the company stated that the strategy caused internal disagreements at Microsoft, with many opposing the model.
According to sources, many believed that day-one Game Pass launches were hurting revenue as fans would just subscribe to the service instead of paying the full $70 price. Hence, the strategy was more profitable for players while reducing sales of the AAA titles produced by Xbox.
The report only confirms what analysts have told us previously, with estimates revealing that Game Pass lost Call of Duty $300 million in revenue while hurting the sales of every title in its catalogue by a whopping 80%.
Furthermore, considering how the service has lost millions of followers since the Activision merger, Microsoft may have a point in bashing a business model that is cannibalising sales while falling short of its expected subscriber total by over 50%.
However, with Xbox no longer allowing Call of Duty titles on Game Pass day one, it does feel like the company has learned from its mistake.
Do you think Xbox shouldn’t put its first-party AAA titles on the Game Pass day one? Does this practice cannibalise sales? Tell us in the comments below or head to the Tech4Gamers forum for discussion.
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Shameer Sarfaraz has previously worked for eXputer as a Senior News Writer for several years. Now with Tech4Gamers, he loves to devoutly keep up with the latest gaming and entertainment industries. He has a Bachelor’s Degree in Computer Science and years of experience reporting on games. Besides his passion for breaking news stories, Shahmeer loves spending his leisure time farming away in Stardew Valley. VGC, IGN, GameSpot, Game Rant, TheGamer, GamingBolt, The Verge, NME, Metro, Dot Esports, GameByte, Kotaku Australia, PC Gamer, and more have cited his articles.
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