Playstation competitor and major console brand Xbox almost became a thing of the past.
A recent report from The Information revealed that Microsoft CEO Satya Nadella faced a critical decision in 2021 to either acquire major game developers to give X Box’s cloud gaming service Game Pass a much needed boost, or shut down Xbox altogether.
Nadella first made the decision to acquire ZeniMax Media, the owner of Bethesda Softworks - a big American video game publisher - for US$7 billion.
Microsoft then acquired video game holding company Activision Blizzard in 2023 for US$75.4 billion.
The acquisitions were Microsoft's attempt to amp up Game Pass, their multi-tiered, paid subscription which launched in 2017 and allows users to access a centralised library of games to be played across devices.
The gaming giant set an expectation to reach over 100 million Game Pass subscribers by 2030, with a 40% year-over-year growth rate.
However, despite the acquisitions and two consecutive years of failing to meet uptake targets, Microsoft retracted their goal in 2023.
Game Pass has consistently faced mixed reviews from consumers despite an industry-wide shift towards subscription gaming, with concerns like affordability, and the user experience remaining a concern.
The Information reported that Game Pass continues to fall short of the company’s expectations, with recent subscription data no longer publicly available.
Game Pass has been viewed as highly volatile, with Microsoft failing to convince game publishers to utilise its cloud services, forcing publishers to turn to competitors Google and Amazon.
But Microsoft does not appear too worried, as like most major tech companies, they have shifted their focus to AI as the future of their business, which has prevented the company’s stock evaluation from dropping significantly.
