Revenue from game subscriptions like Xbox Game Pass has barely grown in 2 years, potentially explaining Microsoft’s studio closures
The megacorp is now reinvesting in “high-impact titles”
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Revenue from gaming subscriptions has reportedly barely increased in the last two years in the US, which might help paint a clearer picture aroundMicrosoft’s recent studio closures.
Video game industry analyst Mat Piscatella took tosocial mediato report that “non-mobile video game subscription spending was only up 1%” compared to this time last year. Compounding that, subscription spending in April 2023 was only 2% higher than it was in April 2022, meaning revenue generated from PlayStation Plus, EA Play, Xbox Game Pass, and similar services saw narrow growth.
Revenue shouldn’t have to balloon annually for an industry to remain healthy, but giant gaming companies have been chasing and investing toward unsustainable growth for years, which makes the above news a little worrisome. Microsoft in particular has gone all out on its Game Pass initiative by launching all its published games into the service andspending $69 billion to acquire Activision Blizzard.
Microsoft shut down four Bethesda subsidiariesyesterday after having acquired them four years ago. Tango Gameworks (Hi-Fi Rush, The Evil Within, GhostWire: Tokyo),Arkane Austin(Redfall, Prey), and Alpha Dog Games (mobile spin-off Might Doom) were all canned, while Roundhouse Studios was folded into The Elder Scrolls Online stewards ZeniMax Online.
Xbox Game Studiosboss Matt Booty sent an email to staff, seen byIGN, explaining that the studio closures allowed the mega corporation to focus on “prioritizing high-impact titles and further investing in Bethesda’s portfolio of blockbuster games.”
Xbox’s strategy at one point seemed to focus on filling out genre gaps in Game Pass with niche games like Hi-Fi Rush, meaning that even if a game didn’t break even via sales numbers, it could still bedeemed successfulas long as it kept a subsect of players subscribed. Hopefully, that line of thinking isn’t completely dead at the company since its buying spree only began less than a decade ago. But dropping more than $70 billion on countless studiosbeforeGame Pass saw substantial growth was, at best, a premature decision.
Hi-Fi Rush fans mourn the studio closure despite critical acclaim and millions of players: “What hope is there for anyone?”
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Kaan freelances for various websites including Rock Paper Shotgun, Eurogamer, and this one, Gamesradar. He particularly enjoys writing about spooky indies, throwback RPGs, and anything that’s vaguely silly. Also has an English Literature and Film Studies degree that he’ll soon forget.
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