Is the holy aura that Xbox Game Pass has lived in these past few years starting to fade? Perhaps so, or perhaps it needs new markets to tap suggests Xbox lead Phil Spencer in a new interview with WSJ Tech Live (and translated by The Verge’s Tom Warren). Currently, the platform reaches audiences through Xbox consoles, PC, and via Xbox Cloud streaming, but the susbscriber numbers, which have grown rapidly over recent years, have started “slowing down” if you believe the company head. So is it panic stations or do they simply need to grow further in new directions?
“We’re seeing incredible growth on PC … On console, I’ve seen growth slow down, mainly because at some point you’ve reached everybody on console that wants to subscribe,” says Spencer in the interview. So with a subscription total that exceeds 25 million at last count, and “incredible growth” in the PC space, what can be done to boost those numbers up further. One of the big questions directed towards Xbox since the launch of Game Pass has centred on the models profitability, many believing that with the numerous $1 subscription offers, and the various deals that we regularly see, coupled with the huge numbers of games regularly coming to the platform, that it simply cannot be profitable. Spencer refutes this however, saying in the interview saying, “Game Pass as an overall part of our content and services revenue is probably 15 percent. I don’t think it gets bigger than that. I think the overall revenue grows so 15 percent of a bigger number, but we don’t have this future where I think 50–70 percent of our revenue comes from subscriptions.”
Spencer outlines in the interview that it is, the mobile investment that they’re making that is primed to pay off in the future. “If you take a long-term bet, which we’re doing, that we will be able to get access to players on the largest platforms that people play on — Android and iOS phones — we want to be in a position with content, players, and storefront capability to take advantage of it,” he said, and investments such the one that is still in limbo involving Activision Blizzard King that will play a big part in that continued growth with the publisher being responsible for three of the biggest mobile games in the business, from Call Of Duty Mobile, to Hearthstone and Diablo Immortal, and of course, the biggest of them all, Candy Crush.
Meanwhile, Spencer addresses another raging industry topic at the moment, price increases for hardware. Recently Sony lifted its prices in some regions, the Meta Quest saw a price hike, while Xbox has held strong to date. Spencer isn’t sure that it’s sustainable though, saying “We’ve held price on our console, we’ve held price on games and our subscription. I don’t think we’ll be able to do that forever. I do think at some point we’ll have to raise some prices on certain things, but going into this holiday we thought it was really important that we maintain the prices that we have.” Some respite for now potential Xbox buyers.