The CMA report, which we covered last week, contained an intriguing assertion from Microsoft that Xbox Game Pass has a negative impact on game sales. The producer made the decision to respond when the media started to show interest in the matter.
The UK Competition and Markets Authority is carefully reviewing the Microsoft and Activision Blizzard issue in order to decide whether to approve or reject the largest acquisition in our sector.
The Xbox Game Pass cannibalizes production sales, according to information in the CMA study. The words went against Phil Spencer’s 2018 speech, which brought up the circumstances surrounding Forza Horizon 4.
“You get more gamers right away when you put a game like Forza Horizon 4 on Game Pass, which actually boosts the game’s sales. Is everyone just going to pay the $10 service fee and play this game, you ask? But instead, users choose their games depending on what their peers are playing.
Because not everyone wants to pay for a subscription, and because some consumers choose to buy the full version of the game when friends are playing a particular position, the head of the Xbox brand claimed that Xbox Game Pass increases sales.
After Microsoft was contacted by Eurogamer about the issue, a representative said that the company “does not contest the assertion that was made to the CMA” and that “the service is an attractive option for developers.”
“Xbox Game Pass gives players and game creators more options and choices for how to find, play, and deliver games. Giving gamers more affordable options to discover new games and play with friends is what this means for them. For developers, this entails adding a new revenue stream for their work. Our primary goal is to assist game developers of all sizes in maximizing the overall financial benefit they derive from Game Pass. Since every game is different, we work together with developers to create a special program that takes into account their requirements, pays them for using the service, and leaves room for creativity and innovation. As a result, more developers are becoming interested in working with Game Pass.
The business is merely concentrating on partnerships, which is not surprising given the “sales cannibalization,” and the number of developers is still increasing. A Microsoft spokeswoman did not explicitly respond to Phil Spencer’s remarks or the CMA report.