Microsoft Expected to Use Activision to Support Xbox, But Black Ops 7 Failed - Media
One of the main reasons for the crisis at Xbox.
A new report sheds light on how Microsoft expected to use the Call of Duty franchise to support the financial performance of the Xbox gaming division. However, the strategy, according to sources, faltered after the release of Call of Duty: Black Ops 7 led to a less successful year for the series.
According to Windows Central journalist Jez Corden, Microsoft actively used profits from Activision Blizzard to support other areas of the Xbox business. However, the weakening financial performance of Call of Duty created additional problems for the gaming division.
According to the report, one of the reasons was the policy of placing new Call of Duty installments on Xbox Game Pass. According to Corden, this negatively affected both game sales and the subscription service.
Placing Call of Duty on Xbox Game Pass led to cannibalization of revenue from both sides. Many players refused to buy the game for about $30, which reduced sales, and the funds received from subscriptions were not enough to compensate for these losses. The model stopped working and required revision, which effectively negated more than a year of growth.
An additional problem was the slowdown in Game Pass audience growth. According to the report, Xbox is struggling to increase sales of its own hardware, which limits the influx of new subscribers into the service's ecosystem. Since Game Pass was one of the main sources of funding for other areas of the Xbox business, the slowdown in subscription growth hit the entire model.
In response to the situation, Microsoft has already begun to adjust its strategy. For example, some future projects, including Gears of War: E-Day, will remain Xbox console exclusives. At the same time, the largest releases will still be available to Xbox Game Pass subscribers on day one.
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