Analysis Reveals That Xbox Game Pass's Business Model May Not Be Sustainable In The Long Run
Xbox Game Pass is a service too good to be real. For a long time, several analysts have made it clear that Microsoft would actually be losing money with this platform. Well, a new report ensures that, in the long term, Game Pass may not be sustainable for the company. Recently, DFC Intelligence published an analysis of the different subscription services offered by the three large companies in the industry. Here it is mentioned that the best model is that of Nintendo Switch online, since it invests little, and generates a lot with its 30 million users. For its part, Sony is also profitable thanks to its 40 million players in PlayStation Plus. However, Xbox Game Pass does not have a similar success. The analysis has indicated that the biggest difference with Game Pass is that this service has become the goal of Xbox, and not an aggregate for users. Since recent years, everything revolves around this subscription. While this platform generates up to three times more income than online switch, it has not been able to improve the company's numbers, and have even stagnated in recent months. DFC Intelligence has pointed out that Xbox Game Pass is not a good model, and in the long term it could negatively affect the company.
The only way in which it would be viable, is whether it will have 100 thousand users, something that neither the purchase of Blizzard Activision would achieve. This was what was commented:
When one makes the calculations, Game Pass is probably generating 3 times the income of Nintendo Switch online and probably approaches the income of PlayStation Plus because it has a higher price. However, Microsoft is giving a lot to generate that income and does not seem to be a long-term sustainable business model. Of course, if Game Pass could somehow obtain 100 million subscribers, the economy would change, but that is a great assumption, because even if the numbers of Blizzard Activision Users are added (except mobile users), the numbers stay very short. A first-line Call of Duty can only reach 30 million units and Blizzard's monthly active users have been around 30 million for years. While analysts have pointed out that Microsoft's big pockets have been able to absorb Xbox Game Pass losses, this would not be forever. We can only wait and see how the company will react.
In related issues, multiple games will be removed from the Xbox 360 store. Similarly, the price of the Xbox Series X | s will increase in Japan. Editor's note: Xbox Game Pass is a great service for users, there is no doubt. However, as a model that has become the company's pillar, it does not work very well to generate the large amounts of money that one could expect.
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