Xbox Game Pass is an important building block in Microsoft's gaming strategy. However, a current analysis provides findings that do not suggest that such subscription services will dominate.
The revenue generated from full-price games represents only a portion of the revenue that flows into the publisher's coffers. There are also in-game purchases and larger download extensions. They now have an equal share of the overall pie. Subscription services are also on the rise. But can they overtake the other forms of distribution?
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Piers Harding-Rolls from Ampere Analysis took himself in an analysis of the console market not only that Live service games and the Publishers with the most active players. He also looked at how many console players use Xbox Game Pass.
Xbox Game Pass only accounts for a small portion of playtime
The proportion of monthly active Xbox console players (MAU) accounted for by the Game Pass portfolio was evaluated, taking into account a period from June 2022 to December 2023. The values were surprisingly constant, usually between 20 and 25 percent.
The proportion of Game Pass titles in Xbox users' total playing time was also evaluated. It is only 15 to 20 percent. The analyst attributes this result to a tendency for lower engagement with subscription titles, as subscribers who are attracted to the all-you-can-eat offer are more likely to experiment more.
The volatility and the resulting lower engagement are particularly important for companies that plan to monetize their titles in-game. This means that service titles and Xbox Game Pass are apparently not an optimal combination.
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When classifying the statistics, it must be taken into account that users of live service titles represent the majority of monthly active players. “Fortnite” alone has an overwhelming following on consoles. It was in February 2024 on PlayStation and Xbox 42 million MAUs. Here players are likely to play less due to their preference Xbox Game Pass or use proportionately fewer subscription titles with a membership.
Subscription services particularly attract small publishers and self-marketers
While Xbox Game Pass helps players spend less time engaging with individual titles, and PlayStation Plus is expected to have a similar impact, subscription services are primarily having an impact on how smaller companies market their games.
According to Piers Harding-Rolls, of 100 of the top-grossing games not from major listed publishers in 2023, 46 were released directly on subscription services or as monthly games for PS Plus subscribers:
- Launch as a subscription: 46 percent
- Premium sales: 40 percent
- Free-to-Play: 14 percent
Subscription services offer a “ready-made audience,” according to the analyst, so a high number of players accessing them is an expected result. But this also poses challenges, as the constant supply of more games results in limited periods of time.
“With the promise of guaranteed licensing revenue, competition for slots within subscription services is growing, meaning that the added value of the licensing arrangements offered by service operators is coming under structural pressure,” the analyst continued.
Ultimately, there are no signs of traditional gaming consumption being displaced: The proportion of playing time that can be attributed to Xbox Game Pass clearly shows that there is no shift towards market dominance in the case of subscription services.
However, according to Harding-Rolls, there is a possibility that the share could change over the course of the year as more Activision Blizzard titles are integrated into Game Pass. Most recently it came via PC, cloud and console to 34 million subscribers.
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