Microsoft has confirmed that the Game Pass “cannibalizes” the sales of video games.
It would be enough to include a video game in the Game Pass to penalize its sales. Documents released by the CMA disprove Phil Spencer.
Microsoft‘s possible purchase of Activision Blizzard has come under the scrutiny of the UK’s Competition and Markets Authority ( CMA ), and a preliminary report released on Feb. 8 reveals more details about how the Xbox Game Pass affects the sales of individual video games.
According to Microsoft, video game sales decreased after the inclusion in the Game Pass catalog. “Microsoft also said its internal analysis shows a [censored] percent decrease in base game sales twelve months after adding to Game Pass,” reads the CMA-released report — which, in the publicly accessible version, obviously does not clearly report the percentage of the decline in sales.
Internal Microsoft documents point out that Game Pass cannibalizes direct sales of games. The exact number of GP’s impact on sales is unknown.
Previously, Microsoft Gaming head Phil Spencer said in a 2018 interview with levelup.com that Game Pass actually encourages sales of the base game.
Microsoft argues that subscription services like Game Pass aren’t a separate market to direct game sales, but are a different type of payment. To support its thesis, Microsoft has presented evidence that gamers frequently switch between the two different “payment methods”. In short, the same players who subscribe to the Game Pass also tend to frequently buy video games at full price.