Microsoft's Bold Move: Call of Duty on Xbox Game Pass: WSJ

Microsoft’s Upcoming Call of Duty to Be Available on Xbox Game Pass

On Friday, The Wall Street Journal reported Microsoft's plans to release the upcoming Call of Duty game on Xbox Game Pass, following the company's acquisition of Activision. This bold move is a gamble for Microsoft, with potential to spur interest in both Game Pass and the Xbox platform. However, it also poses the risk of cannibalizing game sales. The official announcement is scheduled for next month's Xbox Games Showcase, where the game’s availability on Game Pass will either affirm or debunk Microsoft's positioning of the service as a "discovery engine." Microsoft’s gaming division has been steered towards redefining success through Game Pass subscriptions, shifting away from individual game sales or console shipments. This recent unconventional strategy aligns with Microsoft's commercially successful yet brand-challenged console approach.

Key Takeaways

• Microsoft is set to launch the new Call of Duty on Xbox Game Pass, marking a significant gamble for the future of Microsoft’s gaming division.
• Annual sales of Call of Duty games frequently rank among the top 3, primarily driven by their multiplayer modes.
• Microsoft aims to reignite interest in the Game Pass and Xbox platform through this move, capitalizing on the subscription model to access the new CoD at a cost-effective rate in comparison to purchasing the base game.

Analysis

Microsoft’s decision to offer the new Call of Duty on Xbox Game Pass could potentially diminish game sales, yet simultaneously bolster Game Pass subscriptions and elevate the appeal of the Xbox platform. This unconventional move denotes a shift towards emphasizing subscriptions over individual game sales or console shipments. Notably, the traditionally high sales figures for Call of Duty games are largely driven by their multiplayer modes, leading to potential financial implications for retailers and publishers reliant on game sales. While potentially solidifying Microsoft’s standing in the gaming industry, this strategic gamble also raises concerns about the impact on the Xbox brand in the long term.

Did You Know?

• Xbox Game Pass: This is a subscription-based service from Microsoft's gaming division that provides players with access to an extensive game library for a fixed monthly fee. It constitutes a vital element of Microsoft's unorthodox console strategy, centering on subscriptions rather than individual game sales or console shipments.
• Microsoft's Gaming Division's New Strategy: The shift from conventional metrics of success, such as individual game sales and console shipments, to a subscription-based model through Xbox Game Pass is aimed at cultivating a consistent revenue stream and expanding the player base. However, this approach also brings the risks of cannibalizing game sales and potentially harming the Xbox brand.
• Cannibalization of Game Sales: With regards to the launch of Call of Duty on Xbox Game Pass, cannibalization refers to the prospect of the game's availability on the subscription service detrimentally affecting its sales. This scenario could lead some players to opt for the more economical Game Pass subscription instead of purchasing the game outright, resulting in reduced revenue from game sales for Microsoft and Activision.