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Microsoft admits to the CMA that “base game sales” could decline after a year on Game Pass

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Published onFebruary 14, 2023

published onFebruary 14, 2023

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Following the decision by the UK’s Competition and Markets Authority toreject an initial purchase proposalfor publisher Activision Blizzard, Microsoft finds itself scrambling to weigh concessions while adding nuance to concerns, such as the declining impact of Xbox Game Pass on base games sales.

Eurogame has beenamong the first to reportthat as part of its provisional rejection of the Activision Blizzard deal, the CMA citedMicrosoft’s own transparent analysiswhich revealed when a game lands on its Game Pass service, it can result in an undisclosed percentage decline in base game sales twelve months following its addition.

5.61 Microsoft also submitted that its internal analysis shows a []% decline in base game sales twelve months following their addition on Game Pass.• Our assessment5.62 We consider that Microsoft’s telemetry data and internal analysis presented above have some limitations. The time period over which Microsoft appears to infer that a B2P purchase constitutes substitution is quite long (up to one year). Moreover, the observation that Game Pass customers continue to purchase B2P games during the period is more consistent with complementarity than substitutability. Given B2P purchases continue even during the subscription period, it is unclear from Microsoft’s submission whether and to what extent the proportion of consumers that make B2P purchases within a year of closing their subscription is different from the proportion of consumers making B2P purchases that never had a subscription in the first place.

In addition, Microsoft also peppers its reporting to the CMA with figures that undercut the buy-to-play B2P market as well, in which the specific cannibalization figures of streaming games over direct purchases were redacted.

Perhaps, in an effort to justify its own findings, Microsoft argues that there is a nuance in the fluidity in which gamers purchase games, shifting between console B2P and MGS options.

5.60 Microsoft also submitted that Xbox telemetry data shows that gamers frequently switch between the two payment options. In particular, Microsoft submitted that based on this data:(a) Between []% and []% of Xbox gamers continue playing games purchased on a B2P basis in the 12 months after unsubscribing from Game Pass. Between []% and []% of gamers purchase a game on a B2P basis within a year after unsubscribing from Game Pass.

Furthermore, Microsoft also argues that while on the face of it, the telemetry shows a decline in base sales for studios and publishers, the company is also providing additional opportunities for gamers and game developers to “discover, experience, and deliver games.

Microsoft let the CMA know that it is working with developers and publishers to “build a custom program to reflect what they need,” as far as compensation and monetization is concerned. So, while adding a game-to-Game Pass “could” result in a decline in hard copy sales for the title after a year of being on the service, Microsoft appears ready to put in place a compensatory platform for the transition.

Anecdotally, there have been publishers who have advocated for Microsoft’s Game Pass service who saw interest and sales increase when added to the platform.Gameindustry.biz spoke withgame publisher No More Robots about its title Descenders, which saw a significant increase in sales when added to Xbox Game Pass.

While not specifically addressing declining “base game sales” within the Xbox Game Pass platform, the CMA has offered come preliminary concessions for Microsoft to consider to reach an approval on the Activision deal that include excluding Call of Duty and the Activision portion of Activision Blizzard from the proposed buyout.

Kareem Anderson

Networking & Security Specialist

Kareem is a journalist from the bay area, now living in Florida. His passion for technology and content creation drives are unmatched, driving him to create well-researched articles and incredible YouTube videos.

He is always on the lookout for everything new about Microsoft, focusing on making easy-to-understand content and breaking down complex topics related to networking, Azure, cloud computing, and security.

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Kareem Anderson

Networking & Security Specialist

He is a journalist from the bay area, now living in Florida. He breaks down complex topics related to networking, Azure, cloud computing, and security

With KB5043178 to Release Preview Channel, Microsoft advises Windows 11 users to plug in when the battery is low#

Copilot in Outlook will generate personalized themes for you to customize the app#

Microsoft will raise the price of its 365 Suite to include AI capabilities#

Death Stranding Director’s Cut is now Xbox X|S at a huge discount#

Outlook will let users create custom account icons so they can tell their accounts apart easier#

Microsoft admits to the CMA that “base game sales” could decline after a year on Game Pass#