Recent reports indicate that Microsoft was on the brink of shutting down Xbox in 2021 if CEO Satya Nadella had not taken a chance on Game Pass. Despite facing criticism from the Xbox community for making platform exclusives available on rival PlayStation, Nadella’s decision to invest in Game Pass ultimately saved Microsoft’s struggling gaming division.
Xbox’s Survival Hinged on Acquiring Studios
The Information (via ResetEra) released a paywalled report revealing that Nadella had considered either winding down Xbox or finding a way to increase Game Pass subscriptions. Opting for the latter, Microsoft acquired Bethesda and Activision Blizzard for a total of $82.4 billion, securing the future of Xbox.
However, despite these acquisitions, Game Pass is still falling short of its subscription goals. Microsoft aims to reach 100 million subscribers by 2030, which would require a threefold increase within the next five years.
Analysts caution that Game Pass may not be as appealing to consumers and developers as Microsoft anticipates. Gus Zinn from Macquarie Science and Technology Fund believes that the majority of the gaming market may not be interested in a subscription-based service like Game Pass.
Nevertheless, with Microsoft now a major player in the gaming industry and Xbox making its way onto additional platforms, the lack of significant growth in Game Pass subscriptions may not have dire implications for the company’s overall success.