“Game Pass is not needed”: Microsoft almost closed Xbox in 2021

The Information, citing its sources, spoke about the difficulties of Microsoft’s video game business, including its failed closure and unjustified (at least for now) hopes.

Image source: Steam (Alpaca)

According to The Information, in 2021, Microsoft CEO Satya Nadella faced a choice: shut down Xbox or give a chance to the strategy of acquiring large game studios to accelerate the growth of Game Pass subscriptions.

Nadella chose the second option. In the same 2021, Microsoft bought ZeniMax Media (the parent company of Bethesda) for $7.5 billion, and in the fall of 2023 it closed a record ($68.7 billion) deal to acquire Activision Blizzard.

Image source: IGN

Before the deal with Activision Blizzard, Microsoft was counting on 100 million Game Pass subscribers by 2030, but the plan seems impossible. Last winter, the number of service subscribers reached only 34 million people.

According to one Microsoft shareholder, “most of the gaming market doesn’t really need Game Pass.” Several leading game studios allegedly refused to add their projects to the service’s library.

Image source: xbox

Microsoft also hoped that the deal with Activision Blizzard would attract developers to its Azure cloud platform, but so far even Activision is in no hurry to move away from Google Cloud and Amazon Web Services, and also continues to rely on its servers.

Meanwhile, Microsoft began releasing its own exclusives on competitors’ platforms. It started with four separate games and will continue with rumored releases from the company’s biggest franchises, including Halo.