Microsoft Admits Game Pass Cannibalizes Sales

Microsoft has admitted that putting games on its Xbox Game Pass subscription service leads to a marked decline in base sales.

As reported by GI.biz, the confirmation was included as part of the UK Competition and Markets Authority’s provisional report on Microsoft’s proposed $69 billion merger with Activision Blizzard.

Embedded within the 277 page document was a short paragraph revealing that Microsoft had submitted an internal analysis to the government body that showed “a [REDACTED] % decline in base game sales twelve months following their addition on Game Pass”.

The admission clashes with remarks made by Xbox boss Phil Spencer back in 2018, wherein he claimed that adding titles to the service actually boosted sales.

Microsoft’s move to acquire Activision Blizzard has attracted intense scrutiny from antitrust regulators across the globe, and from its primary competitor Sony PlayStation. Many of the objections surrounding the merger stem from the fear that it would give Microsoft the power to make popular franchises, such as Call of Duty, exclusive to Xbox consoles. 

Sony had previously voiced its concerns with the deal in a November 2022 statement, in which it highlighted that the merger could “lessen current and future competition in multi-game subscription services”, such as its own PlayStation Plus offering. In the same statement, the entertainment giant claimed that Xbox Game Pass now had over 29 million subscribers.

Earlier this month the European Union reportedly presented Microsoft with a formal antitrust warning regarding the deal, while across the pond the U.S. Federal Trade Commission is seeking to block the merger with a lawsuit of its own.

Anthony is a freelance contributor covering science and video gaming news for IGN. He has over eight years experience of covering breaking developments in multiple scientific fields and absolutely no time for your shenanigans. Follow him on Twitter @BeardConGamer