Microsoft has shared some interesting new figures in its latest financial report, which was filed earlier this week. According to the report, the company has missed out on its internal growth target for the Xbox Game Pass service once again.
As spotted in Axios and reported by VGC, this makes it two years in a row that Xbox has failed to achieve the yearly targets set in-house. Interestingly, the report also reveals that these targets are tied to Microsoft CEO Satya Nadella’s pay, as well as that of other high-level executives at Microsoft. Overall subscriber growth for Xbox’s game subscription service missed the mark by a considerable margin, according to the latest findings. Whilst Microsoft had set an ambitious target of 73% growth rate for Xbox Game Pass for the financial year ending June 30, 2022, actual subscription growth figures came in far lower. In fact, the figures for Xbox Game Pass subscription growth only came in at 28%.
It was a similar story during the previous financial year, in which Xbox Game Pass growth came in at 37%, despite the company having set an internal target of a slightly more modest 48%. It’s unclear as to why Microsoft set such a high target for itself in this financial year compared to the comparatively slow growth results reported in the previous one. According to Axios’ report, the high benchmark looks set to have been put in place as a specific set of performance incentives for Nadella and other top executives at the company. Either way, they were miles off course with an anticipated figure of 73%, as the latest financial filing shows.
2020 was, perhaps understandably, a much better year in terms of performance on the growth of Xbox Game Pass subscriptions. The company’s internal growth targets were smashed that year after predictions of 71% growth were blown out of the water by actual growth figures of 85.75%. Having said that, the pandemic more than likely had a lot to do with the boom in gaming overall that year. It’s also worth bearing in mind that globally, people are in much tougher economic straits at the moment compared with a couple of years ago, which could explain in part the slowdown in subscription uptake. Whether or not this downward trend will continue, or if things will pick up again, remains to be seen.
The overall downturn in growth was noted earlier this week by Xbox boss Phil Spencer, who explained that subscriptions to Xbox Game Pass on consoles are slowing down in general. He attributed the situation to the service reaching a kind of saturation point, explaining at WSJ Tech Live that “at some point, you’ve reached everybody on console that wants to subscribe.” Despite this, the service still has plenty to be pleased about, with over 25 million people currently subscribed to Xbox Game Pass to date.