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‘We would exit the gaming business’ says Xbox boss – if Game Pass subs don’t increase

‘We would exit the gaming business’ says Xbox boss – if Game Pass subs don’t increase
Is there really an endgame for Xbox? (Picture: Microsoft)

Phil Spencer has claimed that if the number of Game Pass subscribers doesn’t quadruple by 2027 then Microsoft will leave the games industry.

Microsoft may have plugged the leak that saw dozens of highly confidential documents released to the public , but fans are still picking through the details and there have been some pretty shocking revelations.

It wasn’t just information on new hardware and games that was leaked but also the news that Xbox has already given up investing in cloud gaming , at least for the time being.

Even more shocking though is Xbox boss Phil Spencer’s suggestion that Microsoft would exit the games industry entirely, if the number of Game Pass subscribers doesn’t hit 110 million by 2030. Microsoft only rarely reveals subscriber numbers but in January 2022 they were at 25+ million.

The comment came during the Microsoft vs. Federal Trade Commission (FTC) court case, while a FTC lawyer was interrogating Spencer about the slide below, which shows Microsoft’s long-term plans, up to the space year 2030.

Previous leaks already revealed that Microsoft is planning to release its next gen console in 2028 and the slide shows a best case scenario of Game Pass subscribers reaching 110 million within two years of the next gen console launching.

These are not easy goals to reach (Picture: Microsoft)

As noted by Wccftech , Spencer was asked what would happen if they didn’t reach this goal and his answer was:

‘I can fairly safely say that if we do not make more progress than this off of console, we would exit the gaming business. If this were the outcome, we would – I don’t believe we’d still be in the business.

‘A majority of our customers are found off of our own hardware, I would hope by earlier than 2030. So, when you asked me if I agreed with this chart that the light green and blue depending on what colours you see there would have to be much larger much earlier. I would say by financial year 2026, 2027 that we should be in that position, or we’d have to make a different decision with the business.’

In the graph, the dark green section is traditional Xbox console gamers, the light green section is PC gamers, and the light blue section is cloud gaming.

As the other revelations made clear, cloud gaming is currently next to nothing, so that is a lot of ground to make up in just three years. Especially as all previous indicators have been that Game Pass is still underperforming against Microsoft’s expectations.

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However, despite what Spencer said he’s almost certainly exaggerating the consequences. Microsoft’s policy throughout the Activision Blizzard investigations has been to make the company seem like an underdog, barely able to compete against a dominant Sony.

Whether there’s any truth at all to what Spencer said, or if he was just telling the lawyers what benefited his case the most, is impossible to tell.

However, with the Xbox Series X/S still selling well behind the PlayStation 5 and Nintendo Switch, someone at Microsoft must have entertained the question of how long Xbox should continue in the games market, if it continues to languish in third place. Although that person probably isn’t Phil Spencer.

What happens if things don’t work out? (Picture: Microsoft)

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