Xbox Game Pass misses growth target for second year – ruins Phil Spencer's bonus

There’s more evidence that Xbox Game Pass is not performing as well as Microsoft hoped, as Phil Spencer once again misses out on his bonus.

Ever since the disastrous Xbox One era, Microsoft has been very secretive about exactly how well its games business is doing, refusing to release console sales numbers and only occasionally talking about Game Pass – but what glimpses we do get, suggest all is not going well.

Earlier in the week it was revealed that, while it was now profitable, Game Pass growth had begun to slow down because, as Xbox boss Phil Spencer put it, ‘at some point you’ve reached everybody on console that wants to subscribe.’

New information suggests the situation may be worse than he let on, with Microsoft originally having a growth target of 73% for this financial year, but only achieved 28%. That’s less than 2021, when the growth rate was 37%, although that also missed its target, of 48%.

In both cases that meant that Spencer, and other top execs including Microsoft boss Satya Nadella, missed their bonuses. And if there’s anything that gets business execs to sit up and take notice it’s that.

That’s especially true as Game Pass growth is the only gaming performance target Microsoft had, and while it’s not known how much Spencer missed out on Nadella would’ve banked $37 million if the target had been met.

Although much of Game Pass’ appeal relies on day one access to first party games there haven’t been any major ones from Microsoft all year. However, according to Axios, this reporting period is from last July and that does include Halo Infinite and Forza Horizon 5, so that doesn’t really explain it.

What it does explain is why Microsoft has been so keen to buy up other developers, to make more first party games for it. Although it’s already claimed, to various monopoly agencies around the world, that it won’t put Call Of Duty on Game Pass.

The total number of Game Pass subscribers is around 30 million, which worried monopolies investigators, given Sony and others can’t compete with Microsoft in terms of the amount of money they spend on it – which is why Microsoft gave the assurance about Call Of Duty.

All of which make it difficult tell exactly how important Game Pass is to Xbox as a business. The executive bonuses and general popularity suggest it’s viewed as a killer app and yet it’s not growing at the rate Microsoft hoped.

Figures yesterday suggest it only accounts for 10% to 15% of Microsoft’s content and services revenue (the division that includes gaming), while being only mildly profitable. Which means Microsoft will have to look elsewhere for both its growth and profits.

Email [email protected], leave a comment below, and follow us on Twitter.

Follow Metro Gaming on Twitter and email us at [email protected]

To submit Inbox letters and Reader’s Features more easily, without the need to send an email, just use our Submit Stuff page here.

For more stories like this, check our Gaming page.

Source: Read Full Article