Microsoft has invested heavily in its Game Pass subscription service, making it the centerpiece of its gaming empire. However, that empire might crumble without Game Pass. According to Phil Spencer, Game Pass is crucial to keep Microsoft from abandoning Xbox within the next decade.
Microsoft needs Game Pass if it wants to stay in gaming
Microsoft Gaming CEO Phil Spencer has been relatively candid about the company’s situation over the last two console generations. The Xbox One sold less than half as many units as the PS4, and the Series X/S is also falling behind. Microsoft’s acquisition of Activision Blizzard has the potential to be a game-changer for Xbox. However, it might not be enough to keep Microsoft in gaming if Game Pass fails to meet expectations.
During the recent FTC hearing, Spencer explained a chart showing the potential growth of Game Pass from 2023 to 2030. It shows console users in dark green, PC users in light green, and cloud gaming users in light blue. The latter category grows the fastest, with Xbox projecting that the other two will slow slightly after 2027.
However, those projections may be well below what Microsoft needs to stay in the gaming business.
“I can fairly safely say that if we do not make more progress than this off of console,” said Spencer, “we would exit the gaming business. If this were the outcome, we would — I don’t believe we’d still be in the business.”
He went on to explain that, in his opinion, cloud gaming needs to grow much faster and much earlier.
“I would say by FY26, ’27 that we should be in that position, or we’d have to make a different decision with the business.”
