Microsoft is making big strides and Game Pass is only one piece of the puzzle. The subscription service has kept the Xbox Series X/S relevant recently despite the lack of conversation-stealing first-party exclusives, but the company is turning its attention to the mobile space for its next big gaming push. While PS5 console warriors to argue over Call of Duty exclusivityMicrosoft positions Apple and Google as its real competitors.
It could be a favorable turn in the face of unprecedented antitrust scrutiny as it seeks to assert its authority. 69 billion dollars seized Activision Blizzard through regulators in the US and abroad. But when you consider Apple’s total revenue from gaming, it’s believable beating out both Microsoft and Nintendo last year Even though the iPhone maker doesn’t actually make games. Here are nine interesting takeaways from recent earnings calls, regulatory filings and interviews that begin to fill in the picture of Xbox’s present and future.
Game Pass is growing a ton on PC
While Game Pass’s best game library is on console, it’s the PC side of the service that really makes steam. CEO of Microsoft Satya Nadella confirmed from the company most recent earnings call PC Game Pass subscribers are up 159 percent from a year ago. The PC version’s game library has certainly improved in recent months, but the larger installed base is probably the bigger factor. “We’re seeing incredible growth in PC, which is where we’re really focused,” Spencer said WSJ Tech Live.
Game Pass reaches its limit on console
Despite reaching 25 million subscribers overall, Game Pass’ overall growth is still well below Microsoft’s initial expectations. This was reported by Axiosthe company was aiming for 73 percent growth for the year ending June 2022, but instead only reached 28 percent.
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And on the Xbox Series X/S, Spencer seems pretty confident that Game Pass will never make up more than 15 percent of Microsoft’s total content and services revenue. “I don’t think it’s going to get any bigger,” Spencer said on WSJ Tech Live. “At some point you’ve reached everyone who wants to subscribe on the console.”
Microsoft knows a big first-party exclusive is overdue
It may be part of the reason why Game Pass has stopped on console lack of major exclusives. Spencer recently admitted that they haven’t been in the company’s lineup lately. “One thing we’ve heard loud and clear is that it’s been a long time since we’ve shipped what people would say is a great first-party game,” he said. Same Brain podcast. “We may have excuses about Covid and other things, but at the end of the day I know people are invested in our platform and want to have great games.”
At the same time, I suggested that the era of covid-related game delays, at least for Microsoft’s first-party studios, is over. Don’t expect the big holiday drought of 2022 to continue next year, in other words. while Starfield and Redfall both will be released in the first half of next year, as major releases a fairy tale, Forza Motorsport 8, Sureand others are still waiting in the wings.
The rumored device for TVs was on the shelf (literally)
Project Keystone was supposed to be a key to TVs that would let you stream Game Pass in your living room without needing an Xbox. It was rumored to be imminent, but Spencer confirmed that it has indeed been scrapped in favor of more limited solutions through Smart TV manufacturers like Samsung. That Keystone prototype keeps on the shelf? It does not go into production. “Are we going to do a streaming device at some point?” he said on WSJ Tech Live. “I suspect we will, but I think it’s still years away.”
The company is serious about the Xbox store on mobile devices
Microsoft has signaled its ambitions to start competing in the smartphone space earlier this year, but recent regulatory filings in the UK make the plans clearer. “[Buying Activision Blizzard] The addition of Microsoft’s Activision Blizzard content will enhance the ability to create a next-generation game store that works across a range of devices, including mobile devices.” he wrote in October.
Spencer doubled down on that vision at WSJ Tech Live, criticizing Apple and Google’s 30 percent decline in in-app purchases on their respective platforms and arguing that the $69 billion acquisition was a play to make mobile more competitive. console market. “We need to break the existing duopoly of only two storefronts [mobile] platforms,” I said. It’s unclear how the company plans to do this, but potentially more acquisitions in the mobile space aren’t off the table.
Xbox Series X and S consoles are selling at a huge loss
While it’s well understood that console manufacturers often sell devices at a loss, especially at the beginning of a new release cycle, we’ve never known exactly how big those losses were. In no uncertain terms, Spencer recently tackled Microsoft’s losing Xbox Series X and S average between $100 and $200.
That’s the company’s defense of charging the same 30 percent fee on Xbox that Apple and Google complain they charge on profitably sold smartphones. At the same time, it also made the Xbox Series S a huge success. The company announced during its most recent earnings call that half of $300 Xbox users are brand new to the ecosystem.
Prices will rise in the future
Don’t expect this level of discount forever. While Spencer didn’t give specifics, he hinted at it during WSJ Tech Live price increases are coming. “We kept a price on the console, we kept a price on the games for us and our subscription,” he said. “I don’t think we can do this forever, I think at some point we’re going to have to raise the prices of some things.”
While he didn’t say what those things would be, Game Pass and individual game pricing seem like obvious bets. There have been subscription services as a whole recently increasing renewal costsand Spencer pointed to the $60 price point Microsoft maintains Halo Infiniteit’s outdated and doesn’t reflect the increased costs of development or the extra hours many players get out of modern games.
Call of Duty It remains on PlayStation
Microsoft has been clearer than ever no plans to do in the last weeks Call of Duty Xbox exclusive. “It’s not a plan, OK, we’re going to move somebody to where they have to play in the cloud or we’re going to pull it in two or three years. [Call of Duty]”, Spencer said on WSJ Tech Live. “As long as there is a PlayStation to ship, our intention is to continue to ship. Call of Duty On PlayStation,” I said in Same Brain. I liked it Minecraft He said he’d like to see it continue to be supported on PlayStation Call of Duty transition in one form.
Don’t expect a Microsoft VR metaverse anytime soon
Despite his boss announcing integration with Microsoft Meetings, Spencer said at WSJ Tech Live, “To me, building a metaverse that looks like a boardroom — I just find that’s not where I want to spend most of my time.” Meta’s Horizons VR dystopia just weeks ago. The veteran game director said he thinks companies should work on improving 2D gaming metaverses before moving into virtual reality.
