Game Pass Is "Not For Everybody," says Phil Spencer

We've been telling people that GamePass wasn't profitable or sustainable for years and here is Phil basically coming out and saying it.

He's saying it's not for everybody, but not too long ago they expected to reach 100 million subscribers. Not Microsoft has never sold 100 million Xbox consoles in a generation, so yes plus PC and Cloud they absolutely expected everyone to subscribe to GamePass.

This is Phil subtly saying that GamePass is going to change drastically or go away altogether... It sounds like they're going to entirely divest from the console hardware market and focus on being a 3rd party publisher on PC, PS5, and Switch 2 and focus on expanding as a cloud provider.

He isn't try to solve for GamePass? This is one of the most damning interviews he's ever given... It sounds like he has deep regret for creating the GamePass model and how it has destroyed the value of Microsoft first party and as a result the console. Absolutely devastating interview.
 
Sebastian1295 said:
That's corporate spin/corporate speak. They always talk about revenue but never mention the profits from gamepass or how much of a profit they've made from it. I wonder why that is...
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There's a very slim chance Phil pulls the charade off by releasing several games on PS and Switch 2 at a rapid pace for this quarter and the next, right? That way, they can hit their magic success metrics on the Xbox ecosystem while benefiting from strong sales performance on PS and SW2.

At the same time, I don't know if Phil (at least from a PR perspective) can survive another round of Xbox layoffs and studio closures. I'd choose to believe that the Xbox team has been moving the goalposts trying to avoid something like that from happening again....those PS and Switch 2 releases better perform really well
 
adamsapple said:
Content and Services isn't just game pass, but game pass's growth plays a key part in helping it offset other things.

The latest thing know is the quarter with Black Ops (and Indiana Jones) was record breaking as far as GP induced revenue goes.

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Yes, Content & Services isn't just Game Pass. But even if we attribute EVERYTHING to Game Pass, it was still just 2% or $80 million in Game Pass revenue (in reality, it would be even less, because it also includes other non-GP stuff, as you also said).

$80 million growth for Black Ops 6 (among other games) at the cost of declined Xbox and PC sales seems like an awful deal.

Which is likely why we are seeing quotes like these from Phil Spencer that if everyone just stopped Game Pass and instead bought games, it'll also be good for Microsoft.
 
HeisenbergFX4 said:
It Begins Here We Go GIF by hero0fwar
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Now he's rolling back his bullishness on Game Pass. How has the board not FIRED THIS INDIVIDUAL ALREADY?!
 
adamsapple said:
Content and Services isn't just game pass, but game pass's growth plays a key part in helping it offset other things.

The latest thing know is the quarter with Black Ops (and Indiana Jones) was record breaking as far as GP induced revenue goes.

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Imagine not thinking that CoD and Indiana Jones going into GP massively alters the operating cost of the program...

Big changes are coming to GamePass and they'll come before November when the next CoD launches.
 
ChorizoPicozo said:
this has been the vibe for a while, now.
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Yep. This is what I said yesterday in the other thread. Of course, there were some who told me that's not happening.

Heisenberg007 said:
It is more nuanced than that if you think about it. They can't not put their games day one on Game Pass because they have already publicly committed to it. They'd get a lot of backlash if they suddenly stopped doing it.

So, what do they do instead?

They make it difficult to get new games on GP day one. They do that by:
  • Increasing GP price
  • Releasing games earlier via "early access" that GP users can't access without paying extra money.
  • Removing day one games from the Standard tier
If they still believed in the idea of engagement and player count and players playing their games on Game Pass day one, they'd have encouraged it even more. But they're doing the opposite, which means they are slowly moving away from this ideas as much as possible without drawing too much negative PR and backlash.

It's been ~18 months or so (?) and they haven't even released the full ABK backlog to Game Pass yet.

Edit: Kacho Kacho echoed my thoughts well. What I meant to say is that things have been changing for GP and Xbox due to financial pressure, and none of those changes (listed above) increase the number of players playing GP games on day one.
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Heisenberg007 said:
$80 million growth for Black Ops 6 (among other games) at the cost of declined Xbox and PC sales seems like an awful deal.
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That really depends on how much has been off-set to reach that $80m. The 80m is the tip of the iceberg, we really don't know how much weight GP is actually carrying under the water.

Mibu no ookami said:
Big changes are coming to GamePass and they'll come before November when the next CoD launches.
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I personally never felt GamePass is a negative. I love the value of the service. Games like Lies of P, I likely would have never played, just writing it off as a Souls clone. Now I've replayed it multiple times and purchased the game. It's saved me from spending a premium on duds like Starfield. I'm all positive on it.

My issue with Microsoft is they've spent billions to acquire game companies and have very little memorable games to show for it. Look at the last 10 years of games, what are your favorite games? For me, they're almost entirely 3rd party and a few Sony games. I enjoyed some Microsoft games like Doom Eternal, Halo Infinite and Forza Horizon 5, but those are lower on my rankings and it's a pretty steep fall after that. Their lack of notable games has been the worst.
 
adamsapple said:
That really depends on how much has been off-set to reach that $80m. The 80m is the tip of the iceberg, we really don't know how much weight GP is actually carrying under the water.
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80 million dollars is the equivalent of a million copies sold... That is NOTHING

adamsapple said:
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I called GamePass' price going up last year before CoD... and checks notes... I was right. I also called that they would shift to a tiered program.
 
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They have got to be talking about how to wind down game pass. Not necessarily that they are going to do it, but it's gotta be on the table.
 
Don't worry phil, I just rent it from a friend everytime I want to play new "free" games. Keep em coming, my pal made a "great" purchase for us, especially for me.
 
Without getting into the technicalities of digital purchases, I much prefer buying games to renting them. Most fun I have with games are the ones I bought a year ago, put down, and return to. I never get that with GamePass.
 
Almost like Netflix isn't for everyone. There are movie or show collectors/buyers who probably scoff at subs. Obvious.
 
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I like having gamepass around but only as long as it stays being just gamepass around. What made netflix turn to shit was it being challenged by newer streaming companies and they lost the plot. They used to have everything you wanted to watch and trojan horsed their way into households.

MS has been consistent with the games that end of on gamepass. Honestly might start playing Atom Fall tonight because thats exactly the kind of game i'm glad ends up on service and hope that continues.
 
ChorizoPicozo said:
There's a very slim chance Phil pulls the charade off by releasing several games on PS and Switch 2 at a rapid pace for this quarter and the next, right? That way, they can hit their magic success metrics on the Xbox ecosystem while benefiting from strong sales performance on PS and SW2.

At the same time, I don't know if Phil (at least from a PR perspective) can survive another round of Xbox layoffs and studio closures. I'd choose to believe that the Xbox team has been moving the goalposts trying to avoid something like that from happening again....those PS and Switch 2 releases better perform really well
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I can't believe that phil has survived this long. It's honestly embarrassing that they've kept him around considering how many screw ups he's had.
 
Sebastian1295 said:
I can't believe that phil has survived this long. It's honestly embarrassing that they've kept him around considering how many screw ups he's had.
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Satya and Phil are tied at the hip, if Phil goes, Satya will go as well. But the stock is doing well so Phil gets to stay around but he is just a figurehead at this point. Any other CEO and Phil would be long gone.
 
nkill20 said:
Satya and Phil are tied at the hip, if Phil goes, Satya will go as well. But the stock is doing well so Phil gets to stay around but he is just a figurehead at this point. Any other CEO and Phil would be long gone.
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Satya seems lost as well. I really feel like they don't know what to do now that they bought two publishers and have all these studios at their disposal. They keep switching strategies and plans nonstop and it seems like they're banking on cloud and mobile gaming which seems like a fruitless endeavor. I do agree that they seem to be tied at the hip.
 
Mortisfacio said:
I personally never felt GamePass is a negative. I love the value of the service. Games like Lies of P, I likely would have never played, just writing it off as a Souls clone. Now I've replayed it multiple times and purchased the game. It's saved me from spending a premium on duds like Starfield. I'm all positive on it.

My issue with Microsoft is they've spent billions to acquire game companies and have very little memorable games to show for it. Look at the last 10 years of games, what are your favorite games? For me, they're almost entirely 3rd party and a few Sony games. I enjoyed some Microsoft games like Doom Eternal, Halo Infinite and Forza Horizon 5, but those are lower on my rankings and it's a pretty steep fall after that. Their lack of notable games has been the worst.
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Good value for gamers but terrible for MS and gaming as a whole. GP had lots of knock off negative consequences...Doom Eternal had nothing to do with MS btw
 
bender said:
I'd say it's perfect for kids, or rather, kids a few decades ago that endless amounts of time and very little money, but the market is full of free alternatives these days that make the service less appealing.
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The FTP games is a huge issue for a service like that. Doesn't help that the ftp games also fill up the top played games.
 
Very few people understand what he is trying to say here. Its embarrassing.

But anyways, if he wanted to sunset Gamepass, he would simply increase prices to a point where getting it will make no sense.

Something Sony is already doing with PS+ and Nintendo with their retail games.
 
Sebastian1295 said:
I can't believe that phil has survived this long. It's honestly embarrassing that they've kept him around considering how many screw ups he's had.
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I dont remember exactly...but Tim Dog has said some things regarding the power dynamic between Nadella and Phill. 🤔 ....as if Phill was trying to please Nadella´s vision or something like that...

Like Nadella saying:
"In order for Xbox to exist, it needs to follow certain criteria."
And Phil had to come up with a strategy to make Xbox fit into that.

I think Phil is seen as Xbox itself. If he leaves or gets fired, there's no one left to champion Xbox inside MS
 
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