Hmmm
Microsoft misses Xbox Game Pass subscriber target for second year
Game Pass growth is the only gaming metric tied to the CEO's pay.
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Microsoft
targeted a 73% growth rate for Game Pass for its fiscal year ending June 30, 2022, as part of performance incentives for Nadella and other top executives. But the service only achieved 28% growth.
- That's two misses in a row. The company also failed to hit the executive pay Game Pass target last year, after exceeding it in 2020.
- Microsoft doesn't publicize actual Game Pass subscriber target counts, but it said in the filing that its Xbox division has delivered "over 25 million Game Pass subscriptions."
Between the lines: In an interview yesterday at a Wall Street Journal tech conference, Microsoft's head of gaming, Phil Spencer, framed Game Pass as profitable but limited.
- It accounts for 10%-15% of the company's content and services revenue (which includes gaming) and is "profitable for us," he said.
- In remarks transcribed by The Verge, Spencer said Game Pass growth was "incredible" on PC but had slowed down on console, "mainly because at some point you’ve reached everybody on console that wants to subscribe."
- Game Pass' growth might also be stalled due to a lack of available major releases. In the last two years, Microsoft has published few big exclusive games, especially compared to rivals Sony and Nintendo — neither of which bundle new releases into their subscription offerings.