Xbox Game Pass May Be ‘Cannibalizing’ Microsoft’s AAA Game Sales
Ahmed Hassan 
Key Takeaways
Created with AI - we're still experimenting, so apologies if it misses the mark
- Xbox Game Pass may lead to decreased sales for Microsofts AAA games, as subscribers tend to try multiple titles without committing to long-term purchases (also known as cannibalization).
- Games released on Xbox Game Pass could potentially lose up to 80% of their potential sales due to this shift in consumer behavior.
- Although the subscription service generates revenue, Microsofts hardware sales have dropped by 22%, suggesting a possible negative impact on traditional game and console sales due to an overemphasis on Game Pass.
- Despite these concerns, Xbox Game Pass can still benefit multiplatform games by providing increased exposure, potentially boosting sales on other consoles like PlayStation.
Game Pass Subscriptions Potentially Curbbing Microsoft’s AAA Game Sales
A Newzoo study suggests Xbox Game Pass could negatively impact Microsoft’s sales of big-name games. Contrary to common belief, the study, as reported by TheGamer, indicates that adding games to the service’s launch catalog does not significantly alter player habits, as Game Pass users play games with similar frequency and duration as PlayStation users. However, subscribers often try numerous titles without committing to any long-term. This behavior is termed “cannibalization,” where players satisfy their interest through the subscription service instead of purchasing the game, thereby hurting traditional sales. Analysts like Christopher Dring support this theory, estimating that a game released on Game Pass could lose up to 80% of its potential sales. Dring points to Hellblade 2, Indiana Jones, and Starfield as examples of underperforming sales.
Xbox Game Pass Impact on Microsoft’s Traditional Game Sales and Hardware Sales Decline
However, Dring acknowledges that the service can benefit multiplatform games, as Xbox exposure may boost sales on other consoles, such as PlayStation. While Microsoft highlights Game Pass’s success and its approximate annual revenue of $5 billion, the company simultaneously faces a decline in hardware sales. Console revenues recently dropped by 22%, suggesting that despite the subscription service and its content generating revenue, a strong focus on Game Pass launches could negatively impact traditional game sales.
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About the Author
Jonathan Dubinski 
Sophie Laurent 
Carlos Mendoza 
Marcus Thompson 
Bruno Pferd 
