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XBox (Games) Games

Microsoft Confirms Game Pass Cannibalizes Sales (gamesindustry.biz) 76

Posted by BeauHD from the contrary-to-earlier-claims dept.
The UK Competition and Markets Authority's provisional report on the Microsoft-Activision Blizzard acquisition includes an admission from Microsoft that putting games into its Game Pass subscription service cannibalizes sales of those titles. GamesIndustry.biz reports: "Microsoft also submitted that its internal analysis shows a [redacted]% decline in base game sales twelve months following their addition on Game Pass," the CMA noted in its report. That confirmation runs counter to claims Xbox head Phil Spencer made in 2018 that Game Pass boosts sales rather than undermines them.

"When you put a game like Forza Horizon 4 on Game Pass, you instantly have more players of the game, which is actually leading to more sales of the game," Spencer said, adding, "You say, 'Well isn't everyone just going to subscribe for $10 and go play this thing?' But no, gamers find things to play based on what everybody else is playing." Elsewhere in the CMA's report, it cites Microsoft as saying that Activision took a dim view on putting its titles into multi-game subscription services on any platform, believing that "severely cannibalize B2P [buy-to-play] sales, particularly in the case of newer releases."
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Microsoft Confirms Game Pass Cannibalizes Sales More

Microsoft Confirms Game Pass Cannibalizes Sales

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  • > But no, gamers find things to play based on what everybody else is playing.

    Does anyone else think this assumption is fundamentally wrong? I choose games based on what I enjoy playing. I don't five a flying duck about anyone else.

    • Re:Wrong assumption (Score:5, Insightful)

      by skam240 ( 789197 ) on Tuesday February 14, 2023 @06:17AM (#63291455)

      You probably play mostly single player games like myself. Quite a lot of gamers are all about the multiplayer though and when gaming is a social scene you typically go where your friends go.

      • Indeed.
        I can't even count the amount of times I joined a group of players who were forming an organization / clan / group in a certain game, and once a new game appeared, they all left for it.

        • Re: (Score:2)

          by skam240 ( 789197 )

          That pattern is part of why I'm not much of a multiplayer guy. While I'm doing fine for cash I'm just too fiscally conservative in regards to my own finances to be dropping 60 bucks on the latest game to trend in a group only to see it replaced by something else a week later that I then have to buy with the old game from a week ago likely never being played again.

          • I was playing Fortnite for a while with my nephew and his friends, partially to spend time with him during the pandemic, partially because they were looking for a fourth player to fill in. As someone who mostly plays single player games, with the occasional racing sims, I grew to have an intense dislike of Fortnite. Everyone is obsessed with buying the battle pass or playing enough hours to get the battle pass for free. I just used the skin that came free with Borderlands the entire time, but everyone wa

            • Re: (Score:2)

              by nagora ( 177841 )

              I was playing Fortnite for a while with my nephew and his friends, partially to spend time with him during the pandemic, partially because they were looking for a fourth player to fill in. As someone who mostly plays single player games, with the occasional racing sims, I grew to have an intense dislike of Fortnite. Everyone is obsessed with buying the battle pass or playing enough hours to get the battle pass for free. I just used the skin that came free with Borderlands the entire time, but everyone was spending real money just to buy skins. I didn't get it.

              I'm guessing you're older than the other players and have enough experience to know that gameplay is more important than graphics and, like me, barely even register the different skins in these things. I bet you turn the music off too. I don't think I've listened to more than a few seconds of any game's music this century.

              • Re:Wrong assumption (Score:5, Interesting)

                by BackwardPawn ( 1356049 ) on Tuesday February 14, 2023 @07:50AM (#63291537)
                Yeah. I find the whole business model of free-to-play to be disingenuous. Back when I got Rocket League, I payed about $15 and got enough customizations that I don't feel the need to pay for more. I did add some cars for about $2.50 each. Now they give you a single car (and its the worst one). Want more? You have to buy the Battle Pass for the season, it costs as much as I payed for the game. And next season there will be a new Battle Pass. And other players will actively shame you for not using the latest skins (not so much in Rocket League, but definitely in Fortnite).

                I just want to pay for a good game and play.
                • Each sentence after your first few sent my eyebrows shooting further and further into my hairline. The entire thing, from the game management to the player community, just sounds utterly intolerable to me.

                  My experience with Deep Rock Galactic runs so counter to this in every conceivable way, it's Unreal.
                • It's absolutely bizarre the way they got players to attack other players for not having paid skins. I wonder if that's a trick some psychologists figured out or if maybe they are having some people go around doing that as employees.

                  Then again I was a poor kid and I used to get relentlessly attacked for the cheap clothes I wore. When my kid was in high school I spent way too much money on clothing for them so they would look better and I used to bring along a friend with a sense of style to make sure tha

                  • It's absolutely bizarre the way they got players to attack other players for not having paid skins. I wonder if that's a trick some psychologists figured out or if maybe they are having some people go around doing that as employees.

                    Probably just the former. It's not news that people mock the poor.

                    Then again I was a poor kid and I used to get relentlessly attacked for the cheap clothes I wore.

                    I was so poor that I had to put a clip on my required-for-P.E. sweatpants to hold them up. I finally got a new pair when they fell down at school...

                    • I probably should have added context. I think my nephews friends were embarrased by the older, non-hip guy, who used the same skin every game. It became constant badgering about when I was going to break down and get the season pass. They're only consolation was that I wasn't using the default skin. In Rocket League it was mainly my newphew and myself playing duos. I'm not sure how that community is, but my nephew wasn't going to make fun of me. Plus I had the full version of Rocket League.

                    • I've never played this game but if I did I would most definitely use the default skin. Especially if people gave me shit about it.

                • Re: (Score:2)

                  by Zangief ( 461457 )

                  if it only was that I wouldn't have much problems with the change

                  but trying to actually play Rocket League now is a nightmare. You gotta create accounts, click through ads and offers and navigate all the sales

                  it's so annoying for something that used to be really simple

                • In your case you should possibly rather invest in a decent spell checker. That could be money well paid!
                  /S

            • I guess this is Epic's business model now.

              Yes same as roblox&co. Also they use token instead of real currency to display prices, an ugly way to make people buy more(easier to spend 500 v-bucks than $4). Their business models are very ugly (addiction, exploit kids, hide real values, loot box...).

              • That "in game currency" serves a purpose. You can buy a couple thousand tokens for "only" 9.99, making it look like you get a huge amount of smurfberries for a few dollars... then you buy what you wanted, and no matter what you do, you'll have a few berries left over. Too many to just accept it as something you ignore, too few to buy something else. So what do you do? Yes, spend another 9.99 so you can buy something, and the cycle repeats.

            • > I just used the skin that came free with Borderlands the entire time, but everyone was spending real money just to buy skins. I didn't get it.

              I understand it intellectually. It's like going to school every day wearing the same clothes. Sure it works, but clothes are one part of your identity, and in fact most people vary their outfits to a degree based on how they're feeling or what they're doing that day.

              For someone really into multiplayer games -- especially when you get to know people and see them r

              • Yeah, that's pretty much what it was. I was just filling in for their missing friend for a bit, but I played every game with the same skin. They all used the latest skins from the season pass. They also hated my single player strategy, which was to hid in a bush until everyone else was dead and then ambush the last guy. I only moved when the storm forced me.

    • But how do you find those games you like? After all there are tons of games produced in pretty much any genre, so how to select the interesting one? Do you search through tons of crap in steam store, checking every item if its perhaps something that you would like?
      Or perhaps you just encounter the title played by someone else (eg streamer or reviewer) and decide if its interesting based on watching them? If the game becomes popular there will be a lot more of those potential encounters and more people will

      • Re: (Score:2)

        by nagora ( 177841 )

        But how do you find those games you like? After all there are tons of games produced in pretty much any genre, so how to select the interesting one? Do you search through tons of crap in steam store, checking every item if its perhaps something that you would like?
        Or perhaps you just encounter the title played by someone else (eg streamer or reviewer) and decide if its interesting based on watching them?

        This is me, mostly. I don't like multi-player games so I avoid them. That eliminates 90% of popular games at a stroke, so game popularity is not a useful metric for me.

        • And how do you pick new single player games? Do you use a random number generator of some sort to pick? For example, Elden Ring is probably the most popular game of 2022. I have read the reviews and talked to friends; it is not for me. But I did get other people's opinions first.
          • Lets do a deep dive into how a person makes a decision.

          • From observing my offspring it appears the primary factors influencing their purchasing decisions are how fun a game looks in "Let's Play" videos on YouTube.

            My little one (18) is currently hooked on watching Plants vs. Zombies playthroughs where the player adds restrictions to their gameplay to see if it's possible to beat it. e.g. Can you beat the game if you only plant in the center row? Can you beat the game with only two seed slots?, etc.

      • "Do you search through tons of crap in steam store, checking every item if its perhaps something that you would like?"

        That's what I do. I keep close tabs on new games coming out on Steam and GOG. I filter out anything that's multi-player only, anything that has in game payments, and anything that's beta. That means there's really only about a dozen games a month released. So I inspect each one individually and check out YT play videos if I'm not sure.

    • Re: (Score:3)

      by N1AK ( 864906 )
      No. I think a lot of gaming choices are based on what is popular, either because people want to play with their friends, or because if a game is unpopular it's harder to find good matches in the match making system, or for single player games because that is what is being discussed and they want to be in those conversations or those conversations motivate them to try the game.

      Even putting aside the idea that what other people are playing directly influences you, there are thousands of games released ever

    • I choose games based on what I enjoy playing.

      Really?

      How do you find them? Do you go through every game in alphabetical order and try them or do you type random letters in the search box?

      Or... do you see what the week's "top ten games" are and give them a go?

      • I just google "100 best games in my prefered genres of all times" or play games which I used to play and enjoy but not finished as a child, getting closure.

        • So you do care about what someone's opinion then. You just want to appear macho for absolutely no reason.

          • No, I use Top-X charts as guidelines. Then read the descriptions and evaluate if I like it or not. Then I give shortlisted titles a shot. If I don't like it, I move on.

            • To be clear you said: " I don't five a flying duck about anyone else" at the same time you read the opinions and reviews of strangers. Do you not see how those two statements conflict?

              • No. I don't read opinions of others. I make a list of candidates, then look at screenshots and descriptions/videos of gameplay published by developers. I don't care about how popular a game is because many niche/indie games are great but not popular because of their difficulty. Think Nethack, VVVVV, Super Meat Boy, Flywrench, Ninja Gaiden, Ghost 'n Goblins, Contra and the likes.

                • You: "I don't read opinions of others."
                  Also you: "I use TopX charts as guidelines." You:I don't care about how popular a game is . .
                  Also you: Contra (wikipedia: "The arcade game was a commercial success worldwide, becoming one of the top four highest-grossing dedicated arcade games of 1987 . . ."

    • I believe what is more common with younger people, they play what their friends play. I see it in my kids, they only want to purchase games their other friends are playing. It can start from any of them in their group, but they all tend to purchase and play the same games together.

    • And how would you know if a game you have never played is any good? That seems like a major flaw in logic. Unless you never read reviews or ask friends or have omnipotence it seems like a very egotistical thing to say.

      • He said he watches the game play video. Considering games don't really change that much, once you've been playing games for 20 years, it's rather easy to watch a video and decide if you want to waste any time on it or not.

        Single player, you can just keep enjoying old games and even more so if they have a modding community behind them, which older games do because they came with toolkits and what not.

        The industry isn't really trying to target games that have played for 20 years. We are way to picky. They can

    • I agree with you, and I understand my kids (18/22) don't.

      For me, much the enjoyment comes from playing the game, figuring out the puzzles, and learning the skill of the game. Reading the how-to's in Nintendo Power magazine always felt like cheating. My kids don't live in that world. If a puzzle is hard, they'll look it up. They do care about skill, but for them it's much more social than how I engage with games.

  • Obviously (Score:5, Interesting)

    by DrXym ( 126579 ) on Tuesday February 14, 2023 @07:25AM (#63291517)

    Who is going to buy Sea of Thieves or Flight Simulator if they're in their subscription? At the same time, Game Pass is an expensive service and add up to hundreds of dollars per subscriber over the course of a year. Assuming they do their calculations right they'll make more money from a premium service that tosses a few games in than they would if they didn't have a premium service and expected people to buy the games instead (which most people wouldn't do).

    • Re:Obviously (Score:5, Interesting)

      by mridoni ( 228377 ) on Tuesday February 14, 2023 @07:55AM (#63291545)

      I am a (very) casual gamer and I find it very useful: I turn my XBox Series S on maybe two or three times a month, when work takes its toll maybe even less. But when I want to play something it's there and, with games that support streaming, I don't need to waste time installing dozens of GBs just to play an hour while my dinner is cooking. For less than 150 US$ a year (the Ultimate version, that gives me the option to also install games on my PC, if I wish) it's a bargain: I could only buy a couple of games a year with that amount anyway, and I would have to commit to them and them only while, as I said: casual gamer, I like to change.

      I don't know if my case is very representative of what Microsoft had in mind (probably not) but, well, it works for me.

      • Very similar to me. I can't devote the time to gaming that I used to in my teens and 20s so gamepass is perfect. There's a lot of games on gamepass I've only out a few hours into but I enjoyed the limited time I did play them. Those are games that I would never have purchased outright so for those developers it's not lossed income from me and they've increased the people who saw their work and potentially discussed it with others. And then there's a few that really capture my attention and I manage to sink

    • Gamepass has caused plenty of sales from me. I bought AC Valhalla because of gamepass (I played the older AC games on gamepass and was sucked into the latest). I've bought DLC because of gamepass to extend playing time. I bought the latest farcry after playing the previous one on gamepass. I renewed gamepass after 2 years because I enjoy it so much. Honestly, if it wasn't for gamepass I wouldn't even have a xbox.

    • It lets people try games so there is some value in that. It means less value for people who do not play a lot or a lot of different genres.

    • The numbers for gamepass just don't add up. Microsoft has to pay to develop these games and they ain't cheap. They have to keep developing more games to keep people subscribed and because they can't sustain the output they have to pay to get other publishers onboard. It takes months of being subscribed to equal a single AAA release, worse if you are a pre-payed discount customer.

      Let's pretend the majority of the users subscribe endlessly but only play 1 or 2 games. Does that fix it? God no. They still have

      • Re: (Score:2)

        by DrXym ( 126579 )

        I think the numbers are insane for Microsoft. 25 million subscribers at $10-15 a month == $3-4.5 billion in annual revenue. Yeah it costs money to develop content and rotate in some older titles (*) to keep the service fresh but I bet they make way more than it costs to develop. And (*) happens anyway on HumbleBundle, Epic, PSN et al - I'd like to see the contract they offer publishers but I bet it's literally cents per install or a lump sum. And publishers will gladly take the money, especially if they hav

      • You are extremely underestimating the amount of money that Game Pass in generating.

  • Many games have little replay value, while in other cases people will find out they don't even enjoy an entire genre. Trying the game is enough to know they don't want to keep playing it, so there's no reason to buy it even if it's going to drop off of gamepass.

    • Remember when games used to have demos...

      • They still do. But you have to turn towards the indie market to see them.

        There you also see neat games with fresh new ideas. And games that cost about 20 bucks. I have no idea why anyone still pays through the nose for AAA games.

        • Re: (Score:3, Insightful)

          by drinkypoo ( 153816 )

          games that cost about 20 bucks. I have no idea why anyone still pays through the nose for AAA games.

          I like both kinds of game, though as a rule I just wait to play the AAA games until they're cheaper. That also means I can run them on a cheaper computer. There's no shortage of people discussing the old games online, so I can have that if I want even when I'm hopelessly out of date. In fact, I'm in a private retrogaming group on faceboot which includes a bunch of my school chums (and is operated by one of them.)

          I have spent a bunch of hours playing lo-fi games, most of which are far superior to the games t

        • I have no idea why anyone still pays through the nose for AAA games.

          They don't, hence the violently worded piracy discussion I'm having on another forum.

          Oddly the main YT video is about the shaming and inconveniencing of pirates in video games. Guess some don't see the irony.

          • "Piracy" has always been an issue with games since times immemorial. Only recently, though, sales started to decline. And not because of "piracy" because the measures taken to make copying games possible have been tightened again and again... which had its own side effects and led to more "piracy", but I digress.

            People are simply not willing or able to pay 90+ bucks for a game. And yes, I say 90 because that's the actual price tag if you factor in all that mandatory "0day DLC" and "game pass" bullshit. It's

    • Exactly this. But then, stores like Blockbuster used to rent games for $7/week. This was essentially the same service they're offering and also cannabalized sales, assuming you could beat a game in a week or two. There's nothing new going on here and it shouldn't be complicated. Assign value based on what people actually play and determine if you come out ahead selling a subscription or selling games. Basic cost accounting.
      • Unfortunately we already know what lies at the end of that kind of cost accounting. Gacha wins. Make the starting price cheap or free, get them hooked, ratchet up the pay to continue until just before the breaking point. Repeat. If you like playing non-gacha games you don't want gamepass to succeed as the inevitability is that one day microsoft will stop footing the bill for this grand experiment and so they'll either need to raise the price to the consumer (highly unlikely) or drop the payment to publisher
  • The COD game itself is not the cashcow, it's the DLC and this is the same for most of the AAA multiplayer titles out there nowadays. The fact that Warzone massively increased the coffers of Activision whilst being a free to play game just demonstrates this. Very few people who played MW2019 but not WZ spent money on DLC other than the season map packs.
    • If you are referring to Warzone - that scrapes your PC for data just like any free game on a phone would do (that is where the real money is)

  • Games I would have never bought (Score:3)

    by srichard25 ( 221590 ) on Tuesday February 14, 2023 @11:38AM (#63291895)

    I've played many smaller indie games on GamePass that I would have never bought. Most probably won't have even been on my radar. I assume those gaming companies got some compensation from being on GamePass, which is more than they would have received from me otherwise.

    As far as the larger well-known titles that I've played on GamePass, they probably did lose a sale from me. For instance, I would have bought the latest Halo game if it wasn't on GamePass. But I'm assuming that Xbox can write much of that off as a marketing expense to get more people buying Xbox and using their monthly subscription.

  • Game pass has saved me $70 a bunch of times. For $10 a month I get to play the games I like, and avoid the ones I don't, with a much cheaper cost of entry.

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