Microsoft admits Xbox Game Pass has reduced game sales

Microsoft has revealed its base game sales have decreased significantly since the launch of Xbox Game Pass.
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In a report to the UK Competition and Markets Authority (CMA), Microsoft has confirmed Xbox Game Pass has had an impact on overall game sales since it launched in 2017. As surfaced by GameSpot, a recent CMA report claimed Microsoft’s ‘internal analysis shows a [redacted]% decline in base game sales twelve months following their addition on Game Pass.’

While an exact figure was not revealed, it was considered significant enough to be notable, and was listed as a contributing factor in deciding whether Microsoft’s potential acquisition of Activision Blizzard was anti-competitive.

As stated later in the report, Xbox Game Pass does definitively cannibalise outright purchases of games, thus leading to lower sales totals for Microsoft. While players continue to purchase games while using Xbox Game Pass, it does appear the rate has slowed, since Xbox Game Pass often includes major first-party titles at launch, for a minimal subscription fee.

Read: Microsoft’s Activision Blizzard deal gets CMA provisional warning

The difference between paying AU $99.95 for a single game, or paying AU $10.95 for a single monthly subscription which allows access to a vast array of games, is significant – particularly in modern economic circumstances. This shift in game purchases, while seemingly revealed for the first time here, is a logical conclusion.

As GameSpot notes, this reveal is also at odds with previous sentiments expressed by Microsoft.

As Microsoft Head of Gaming Phil Spencer said in a 2018 interview, ‘When you put a game like Forza Horizon 4 on Game Pass, you instantly have more players of the game, which is actually leading to more sales of the game. Some people have questioned that, but when State of Decay 2 launched, you saw, if you looked in the US at the NPD, you saw this game selling really well the month it launched on Game Pass.’

While the CMA noted that certain players would continue to purchase games beyond those available on Xbox Game Pass, the decline in game sales for titles included on Xbox Game Pass was consistently referred to in its report. This suggests that while players are using hybrid methods to play games on Xbox, Xbox Game Pass is actually taking away potential sales from the company.

The service is a massive boon to fans, and provides great options for playing the latest games at affordable prices – but it has contributed to notable, significant declines for Microsoft.

We’ll likely learn more about this revelation as the CMA continues its investigation, and the FTC kicks off a similar anti-competitive lawsuit in the United States.

Leah J. Williams is a gaming and entertainment journalist who's spent years writing about the games industry, her love for The Sims 2 on Nintendo DS and every piece of weird history she knows. You can find her tweeting @legenette most days.