Microsoft might have shot its foot by putting Call of Duty on Game Pass. A new report claimed that the decision has cost the company millions of dollars in sales. Interestingly, the company initially claimed that putting games on Game Pass day one doesn’t affect sales.
Some developers have previously slammed Game Pass, saying the model is not sustainable and is destroying the industry. A recent report by Bloomberg claimed the decision to put Call of Duty on Game Pass cost Microsoft hundreds of millions in sales.
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The Bloomberg report included testimonies of current and former Microsoft employees. One of the respondents who spoke on the condition of anonymity said Microsoft had to give up around $300 million in sales on Black Ops 6.
Although the sales figures of Black Ops 6 were positive, the Bloomberg report cited that the reason was that 86% of PlayStation players purchased the game, according to IGN discovery.
Many of those interviewed by Bloomberg said Game Pass has been detrimental to Microsoft’s sales numbers and has cost the company more than it should. Perhaps it was this realization that inspired the October 1st price hike of the Game Pass Ultimate tier, which led to an uproar.
When Microsoft acquired Activision for billions of dollars, it likely hoped to recoup that investment in a few years with the help of strong Call of Duty sales. Therefore, losing such an amount on Call of Duty will definitely set back whatever goals they have set.
Unless Microsoft can make up the loss by increasing the price of Game Pass, the future looks worse for the company and its employees, who may take another hit in the form of layoffs. Unfortunately for Microsoft, the backlash from subscribers and the undisclosed number of players that cancelled their subscription following the price hike means they are at a crossroads.
The Game Pass Model that will work
While Game Pass has been undoubtedly useful to both gamers and smaller developers, the consequences of the model on the broader industry have not been friendly. Established developers have particularly felt the negative impact of Game Pass.
But, is there a way to make the model work? The answer is yes, and some developers have openly talked about it before. The model of Game Pass that will work will not include day one releases, but rather depend on a back catalogue, which is basically what other game subscription services, including PSN, do.
Releasing titles day one on Game Pass removes every incentive for players to purchase the title, except those who really love the game and want to have it for keeps, or those who wish to support the developers.
However, it is understandable that Microsoft is using the Day One release as an incentive to get gamers to subscribe to their service instead of their major competitor. However, they must find a way of making the service turn a profit to prevent a backlash from their investors.
