Game Pass’s “only (outside) shot” for sustainability is to get GTA 6 or Call of Duty, says former Microsoft senior PR lead

10.05.2024 - 10:27 / rockpapershotgun.com / Game Pass

Former Microsoft senior PR lead Brad Hilderbrand has blogged about the recent closure of Tango Gameworks and Arkane Austin, making a familiar case that Microsoft’s gaming division are now expected “to cut expenses to the bone” in the wake of the wildly expensive acquisition of Activision Blizzard and amid slowing growth of the Game Pass subscription business. In Hilderbrand’s view, Game Pass will likely never be sustainable or profitable. Microsoft’s only chance on this front, he says, is “to put all the world's biggest games on the service” – namely, Call of Duty, which still earns hundreds of millions annually in direct sales, or GTA 6, which, hahahaha.

Hilderbrand was himself laid off by Microsoft as part of the company's latest bout of bone-cutting, after four years and eight months at the company during which he worked on Halo: The Master Chief Collection, Halo Infinite and Forza Motorsport. Posting on Linkedin, he begins with a potted analysis of why Game Pass isn’t working for Microsoft – briefly, the returns attributed to individual Game Pass games are no longer satisfactory given slowing subscription sign-ups and Microsoft Gaming’s colossal recent splurging on acquisitions.

"The biggest paradox with Game Pass is that basically every game that launches on the service badly misses its sales goals. Makes sense though, why pay full price to buy a game when you can play it for "free" as part of your subscription? This is accounted for somewhat by attributing portions of revenue to top-performing Game Pass games every month, but there are factors working against games. Namely, the fact that most games don't stay at the top of the chart for more than a month or two, and also that Game Pass growth has stagnated. So games like Hi-Fi Rush, which is incredible mind you, gets a very small bump in revenue from being the hot Game Pass game for a month, then it falls off a cliff when everyone moves onto the next thing. Poor Redfall had it even worse since it launched so rough, it never had a chance.

"This system was fine for a while when Game Pass was growing like gangbusters, but now it's slowed way down and the amount of revenue it's attributing to games isn't keeping up with the budgets to make them."

Hilderbrand comments that Xbox “was basically a rounding error on Microsoft’s books” in the past. “Then Xbox went on a buying spree and spent a lot of money on Bethesda, but orders of magnitude more on Activision,” he writes. “Now, the Eye of Sauron has turned, and Xbox is expected to start making that $70B back, or at least cut expenses to the bone (and then some) while they try.”

Microsoft’s “big bets” for driving Game Pass subscriptions haven’t done well enough, he adds, naming Starfield and