Microsoft disclosed that Xbox Game Pass subscriptions grew at a rate far below the company’s expectations, marking the second consecutive year of weaker-than-projected subscriber performance for the gaming subscription service.
Growth missed fiscal-year projections
In a filing covering the fiscal year that ended June 30, 2022, Microsoft had forecast a 73% year-over-year increase in Game Pass subscriptions but recorded only 28% growth.
The company does not publish an exact subscriber total, but the document states the Xbox division achieved “more than 25 million subscriptions” to Game Pass.
Previous-year target also missed
Microsoft set a 48% growth target for the fiscal year 2021 but reported a realized increase of 38% for that period.
Game Pass contribution and pricing outlook
Phil Spencer, CEO of Microsoft Gaming, told the Wall Street Journal that Game Pass is profitable despite the recent results and accounts for roughly 15% of Microsoft’s overall content and services revenue.
Spencer also warned that subscription prices could rise in the future. He said the company has kept console, game and subscription prices steady but does not expect to maintain that indefinitely, indicating price increases may be necessary at some point.
