Oct 19, 2021 - Technology

Xbox Game Pass subscriptions miss Microsoft’s target

Xbox game pass gift cards are seen in a store in Krakow, Poland on August 26, 2021

Xbox Game Pass. Photo: Beata Zawrzel/NurPhoto via Getty Images

Subscriber growth for Microsoft’s signature gaming service, Xbox Game Pass, was slower than the company hoped for in the past year, according to a new financial filing.

Why it matters: Xbox Game Pass is often touted as the best deal in gaming and its subscriber count is a shorthand measure of Microsoft’s gaming success.

By the numbers: For the 12 months that ended on June 30, Xbox Game Pass subscriber growth was up 37%, but the company had set a 48% growth goal.

  • In the company's prior fiscal year, which ran from mid-2019 through mid-2020, Game Pass subs were up 86%, exceeding a target of 71%.

For those who just want to see actual subscriber counts, that’s the catch. Microsoft hasn’t been sharing them lately.

  • The most recent confirmed figure is 18 million, as of January.
  • The service costs $10/month for console or PC players, or $15/month for a combo.

Between the lines: While it’s notable that Microsoft missed one target, it's also of interest that Game Pass subs are a target at all.

  • In 2019, the company added Game Pass subscriber growth to a short list of performance goals for top executives, including CEO Satya Nadella.
  • It’s the only pure gaming metric listed in the execs’ payment plan, and sits alongside other priority targets including a number of LinkedIn sessions and usage of Microsoft Teams.
  • Reaching certain targets over the course of three years pays out more stock to those executives.

The big picture: Game Pass is core to Microsoft’s model of gaming’s future, one in which players subscribe to the all-you-can-play service and play its games on Xbox consoles, PCs, phones and, eventually, smart TVs, via streaming if necessary.

  • Xbox management has spent the last couple of years flooding Game Pass with a remarkable array of high-quality games, including its own marquee releases and lots of excellent indies.
  • Just today it announced 11 more notable releases for the service for this month alone.
  • But if Microsoft is struggling to get Game Pass where it wants, it will have a strong sales hook 13 months from now with the release of Bethesda's highly anticipated exclusive “Starfield.”
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