Xbox May Leave Gaming If Game Pass Fails To Grow Beyond Consoles By 2027

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"We Would Exit The Gaming Business!"

Xbox Game Pass has become deeply integrated into the Xbox ecosystem. The service currently boasts a vast library of first and third-party games, in addition to day-one releases for massive titles like Starfield and Lies of P.

The subscription service has opened up new opportunities for Xbox, as it made nearly $3 billion just from Xbox Game Pass in 2021. However, the subscription is not reaching new users as rapidly as Microsoft expected.

Last year, the subscription missed its subscriber target by 10 million users. According to a recently leaked document, Microsoft plans to leave the gaming industry if it does not see enough growth in Xbox Game Pass users by 2027.

Why it matters: Microsoft appears to have bet everything on Xbox Game Pass, with its entire approach revolving around the service for the current and next generation.

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As reported by Wccftech, the slide above was shared by one of the FTC lawyers, who asked Phil Spencer about the projection of Xbox Game Pass reaching over 100 million players between Fiscal Year 2029 and 2030.

While replying, Phil stated that this projection is not the most accurate, and Xbox seeks more growth by the end of 2027. Addressing the increase in users from the cloud and PC market, Phil Spencer said:

“I would say by FY26-27 that we should be in that position.”

He then pointed to the PC and cloud users presented in the chart and claimed that these numbers would be unsatisfactory for Xbox, leading to grave consequences and potentially forcing them to change direction. Phil Spencer said:

“I can safely say that if we do not make more progress than this off of console, we will exit the gaming business.”

This may be worrying for Microsoft since recent reports have suggested that gaming subscriptions have plateaued in the US after steady growth in recent years.

Xbox Game Pass Microsoft First Party AAA Games

While the gaming giant is dedicated to Xbox Game Pass, it hopes to stay relevant in the console gaming industry, competing with rivals like PlayStation and Nintendo through its unique subscription-based appeal.

As for the current split between Xbox Game Pass users, a recent report suggested that 15 million subscribers are PC users, while the total number of subscribers lies between 25-30 million.

However, Microsoft wants to offer a gaming ecosystem through different hardware, which requires significant growth across all platforms, including PC and cloud gaming.

Nonetheless, Xbox hopes to use acquisitions like Activision Blizzard to strengthen its Xbox Game Pass library and bring more people to the Xbox ecosystem. In turn, this would lead to more subscribers and ensure Microsoft continues to stay in the gaming industry.

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