Microsoft has recently admitted that the Xbox Game Pass subscription service causes a significant decline in base game sales. This admission contrasts the remarks made by Xbox CEO Phil Spencer in 2018, who claimed that adding titles to the service actually boosted sales.
According to a provisional report by the UK Competition and Markets Authority for the ongoing investigation into Microsoft’s proposed $69 billion merger with Activision Blizzard, an internal analysis submitted by Microsoft shows a redacted percentage decline in game sales twelve months following their addition to Game Pass.
The proposed merger has sparked intense scrutiny from antitrust regulators globally. The EU recently issued a formal antitrust warning to Microsoft, while the US Federal Trade Commission has filed a lawsuit to block the merger. The news of declining base game sales on Xbox Game Pass is likely to raise further concerns among regulators, who are already worried about the impact of the merger on competition in the gaming industry.
Microsoft’s recent admission could be seen as evidence that the company is attempting to use its subscription service to dominate the market, potentially making it harder for other companies to compete. Sony, Microsoft’s primary competitor, has previously voiced its objections to the merger. In a statement released in November 2022, the company warned that the merger could “lessen current and future competition in multi-game subscription services”, such as its own PlayStation Plus offering.
What are your thoughts on Microsoft’s latest admission? Is Microsoft attempting to use its Xbox Game Pass to dominate the market? Let us know in the comments below.