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Activision Hasn't Helped Microsoft Grow Xbox Game Pass, Says Report

Posted on 1/15/25 at 7:00 pm
Posted by NJDevil89
Chitown
Member since May 2017
51 posts
Posted on 1/15/25 at 7:00 pm
LINK
quote:

A new report from The Information, with comments from various industry shareholders, sheds light on how well Activision has served Microsoft's goals. For starters, Game Pass' revenue grew by 5.7% in the year to June, which is below the internal target of 11%. Following the service's declining growth rate, it was dropped as a metric contributing to Microsoft CEO Satya Nadella's pay in 2023.

Game Pass' reported failure to increase interest in Xbox hardware investment is leading Microsoft to port its first-party games to competing platforms like the PS5. Some game developers are also choosing to skip Xbox or delay their games on the platform, due to technical difficulties working with the Xbox Series S.

Posted by imjustafatkid
Alabama
Member since Dec 2011
57733 posts
Posted on 1/15/25 at 10:50 pm to
quote:

Activision Hasn't Helped Microsoft Grow Xbox Game Pass, Says Report


quote:

Game Pass' reported failure to increase interest in Xbox hardware investment


These are not the same things.

quote:

Game Pass' revenue grew by 5.7% in the year to June


Not sure what sort of increase they were looking for, but a 6% increase seems pretty good to me given the number of Activision games they've added so far.

ETA:
quote:

A new report from The Information


They want an email address to read this report, so that's unfortunate.
This post was edited on 1/15/25 at 10:53 pm
Posted by td01241
Savannah
Member since Nov 2012
25072 posts
Posted on 1/16/25 at 4:50 am to
I play on ps5 and pc and hate what consolidation is doing to gaming but im just going to dismiss this out of hand. There is a 0% chance CoD didnt have at least some upgrowth in subs. Now will that sustain long term? Much more in doubt.
Posted by Henry Jones Jr
Member since Jun 2011
72500 posts
Posted on 1/16/25 at 6:12 am to
quote:

A new report from The Information
Is this supposed to be a credible source?
Posted by UltimateHog
Oregon
Member since Dec 2011
67573 posts
Posted on 1/16/25 at 8:20 am to
quote:

For starters, Game Pass' revenue grew by 5.7% in the year to June, which is below the internal target of 11%

Damn that is a massive miss.
Posted by td01241
Savannah
Member since Nov 2012
25072 posts
Posted on 1/16/25 at 8:25 am to
I have seen it reported places that the actually for sale like 70$ black ops 6 game, not the game pass version, has done astronomically well compared to expectations. I presume this is mostly being ps5 and pc players buying the game but ive also seen it said that the games sales on xbox consoles was stronger than anticipated given its on gamepass. CoD was always going to be a huge win at least in the short term of 5 ish years for Microsoft. The people who objected to the buying of activision because they thought it would make cod a console exclusive are dumb and i told them that at the time. There were many reasons to object but that wasnt one because it would never happen.
This post was edited on 1/16/25 at 8:27 am
Posted by Roaad
White Privilege Broker
Member since Aug 2006
79337 posts
Posted on 1/16/25 at 1:47 pm to
quote:

Is this supposed to be a credible source?
Well, it isn't The Opinion or The Rumor.

That's gotta count for something
Posted by imjustafatkid
Alabama
Member since Dec 2011
57733 posts
Posted on 1/16/25 at 5:59 pm to
quote:

Damn that is a massive miss.


I find it hard to believe they projected at 11% increase when they've only released maybe one Activision game per month so far. They'd have needed to drop the whole library all at once to get those kind of numbers.

Wish I could read the actual report so I could know where they got their numbers from, but I'm not giving that shady website my email address.
Posted by StansberryRules
Member since Aug 2024
2689 posts
Posted on 1/16/25 at 6:19 pm to
I thought they massively overpaid for the deal.

Call of Duty is still popular but it's not what it once was.

Blizzard is an empty shell of its former self, no talent remaining at the company. Very few companies on the planet have experienced the PR 180 quite like they have. From universally beloved and celebrated to being a mostly derided laughing stock in a decade's time.

King is probably the most valuable thing that was actually part of the acquisition. The most money for the least overhead and trouble.
Posted by imjustafatkid
Alabama
Member since Dec 2011
57733 posts
Posted on 1/16/25 at 6:26 pm to
At the time of purchase, entry into the mobile space was given as the primary reason for the purchase. They also said ABK having actual assets as opposed to just IP was part of the decision.
Posted by UltimateHog
Oregon
Member since Dec 2011
67573 posts
Posted on 1/16/25 at 6:33 pm to
I doubt it is shady as sourced for a Newsweek article, I used my fake burner email and it says the numbers are from security filings for CEO Nadella.

Other notes
quote:

Gaming was the only section of his pay evaluation that fell short of Microsoft’s goals. Meanwhile, in the three months ending Sept. 30, Microsoft indicated that its gaming division didn’t grow at all without the first-time contribution of Activision revenue in the quarter.

quote:

Several leading game studios have resisted Microsoft’s pitch that they should put their titles on Game Pass in exchange for fees that Microsoft offers to pay to the gaming studios, according to people familiar with the discussions.

“I just think the majority of the game market doesn’t really want a game pass” like the one Microsoft is offering, said Gus Zinn, a portfolio manager of the Macquarie Science and Technology Fund, which holds roughly $400 million in Microsoft stock and has kept its Microsoft position roughly flat over the past year.

quote:

Before completing the Activision acquisition, Microsoft targeted having over 100 million Game Pass subscribers by 2030, meaning it would have to triple its current subscriber base in five years—or grow at a rate of 40% annually, which would be faster than its rate of growth every year since 2020.

Posted by Roaad
White Privilege Broker
Member since Aug 2006
79337 posts
Posted on 1/16/25 at 6:37 pm to
I think this is one of those where the people who hate Xbox are going to accept this as gospel, and the Xbox fans are going to say fake news

If you are engaged in the console wars, you are simply gay as frick.

I have all 3 consoles and a gaming PC. They are all great, and I enjoy them all.
Posted by chadr07
Pineville, Louisiana
Member since Jan 2015
10344 posts
Posted on 1/16/25 at 7:30 pm to
Exactly
Posted by UltimateHog
Oregon
Member since Dec 2011
67573 posts
Posted on 1/16/25 at 7:41 pm to
quote:

I thought they massively overpaid for the deal.


They definitely did.

quote:

Blizzard is an empty shell of its former self, no talent remaining at the company. Very few companies on the planet have experienced the PR 180 quite like they have. From universally beloved and celebrated to being a mostly derided laughing stock in a decade's time.


Agree, and could say this for several studios now.
Posted by td01241
Savannah
Member since Nov 2012
25072 posts
Posted on 1/16/25 at 7:47 pm to
I have been PlayStation all my life except for the 360 era we had both. Now I have a ps5, pc, and switch. The console wars are fricking gay as you said and are used to divide us so we can’t channel appropriate anger at studios and publishers when needed. Do I hate a lot of shite Xbox does? Yes I do. I really really do and I would never even consider a console from them because they’ve basically made it clear their future is 3rd party publishing, which tails off the thing I hate about them most. Consolidating. It make Sonys dumb asses feel like they had to do some shite so they bought bungies broke arse for billions and that situation is also wrapped up in 400m at least on concord.

None of this means I want Xbox to fail. Imo that would be catastrophic because Sonys way too fricking smug as it is. I’m also generally going to always be against exclusive games, unless it’s first party. Anything second or third should be on all platforms it aims to come to within 6-12 months.
Posted by imjustafatkid
Alabama
Member since Dec 2011
57733 posts
Posted on 1/16/25 at 8:33 pm to
quote:

I think this is one of those where the people who hate Xbox are going to accept this as gospel, and the Xbox fans are going to say fake news


It might be true, I'm just not going to take the word of some shady website that wants my email address before seeing their report.

If it is true, my take is that Microsoft is stupid to expect that sort of return before putting all the Activision games on the service.

If they had dropped all the ABK games on Game Pass on day one, then I might understand expecting 11%, but imo a 6% increase should be seen as a success given the minimal number of games that have been added so far.

Of course, all of that assumes the report from this very suspect source is true.
Posted by Klark Kent
Houston via BR
Member since Jan 2008
69511 posts
Posted on 1/17/25 at 6:12 am to
quote:

If it is true, my take is that Microsoft is stupid to expect that sort of return before putting all the Activision games on the service.

If they had dropped all the ABK games on Game Pass on day one, then I might understand expecting 11%, but imo a 6% increase should be seen as a success given the minimal number of games that have been added so far



until they drop ALL the COD titles onto the GamePass, I’m not sure why they care what the increase % is. It’s irrelevant.
This post was edited on 1/17/25 at 6:23 am
Posted by imjustafatkid
Alabama
Member since Dec 2011
57733 posts
Posted on 1/17/25 at 10:26 am to
quote:

until they drop ALL the COD titles onto the GamePass, I’m not sure why they care what the increase % is. It’s irrelevant.


You are absolutely correct.

If this report is true, what it says to me is Microsoft's current corporate leadership doesn't understand the gaming industry. There's no way anyone should have expected that sort of return specifically in Game Pass subscriptions without first getting those games on the service.

They should get someone from Xbox to explain it to them. "Activision games can't increase Game Pass subscribers if they aren't on the service." Seems like something the CEO of a massive multinational corporation could understand.

Assuming this report is true, that actually might be the real reason this was removed from his bonus metrics as opposed to whatever speculation otherwise. 11% wasn't a realistic target given the circumstances.
This post was edited on 1/17/25 at 10:33 am
Posted by Klark Kent
Houston via BR
Member since Jan 2008
69511 posts
Posted on 1/17/25 at 11:48 am to
agreed.



I have Game Pass. And there hasn’t been anything of note released in months, minus Indiana Jones and The Great Circle. Maybe UFC5? Sure they added BLOPs 6, but despite the hype it’s been an incredibly disappointing iteration of COD. Mehh. None of the above would/should drive traffic like the old CODs.

And COD: Black Ops 6 is in such a pathetic state right now between cheaters, dogshit Warzone innovation and integration, server issues, and overtuned SBMM that people are leaving that game in droves. Player count has plummeted, not increased. If M$ were to force Activision’s hand and flip the switch on just BLOPs 2 being on Game Pass, I guarantee they would inherently see an uptick in sign ups.

BUT I’m not sure they are going to tho, because they don’t want kneecap Black Ops 6 (even tho it may be too late to save). It puts COD in a real bad spot, one they’ve rightfully earned to be in.
This post was edited on 1/17/25 at 11:54 am
Posted by imjustafatkid
Alabama
Member since Dec 2011
57733 posts
Posted on 1/17/25 at 12:19 pm to
I don't really play COD but I get it's a big deal. They definitely need to put almost the old games on there. I want to play through the single player campaigns once they do.

I'm sure they'll get it done eventually, but they've definitely been dragging their feet on it. I have to assume part of it is related to updating contracts with talent, music, etc so the games can be put on a service like Game Pass. Or maybe even waiting out some "no streaming service" clauses ABK may have entered into with Sony when they were doing PlayStation exclusivity deals. That can't possibly be all of it though.
This post was edited on 1/17/25 at 12:20 pm
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