Microsoft admits that its Game Pass system is hurting its sales

In a report submitted to the UK Competition and Markets Authority regarding Microsoft’s proposed acquisition of publisher Activision Blizzard, we learned that the Redmond giant’s Game Pass subscription platform led to a significant drop in sales of core games.

Because once it was made available on the Game Pass platform, we noticed a drop in sales of base games twelve months after we added it.

The admission contradicts statements by Xbox CEO Phil Spencer in 2018 in which he claimed that adding titles to the online service actually drives sales.

Microsoft’s decision to acquire Activision Blizzard for $69 billion has drawn intense scrutiny from antitrust regulators around the world and its biggest rival, Sony PlayStation. Many of the objections surrounding the merger stemmed from concerns that it would give Microsoft the ability to create popular franchises, such as Call of Duty, exclusively for Xbox consoles.

Activision Blizzard: Nothing has been decided yet for Microsoft

Sony had previously expressed concerns about the deal in a statement dated November 20, 2022, in which it noted that the merger could “reduce current and future competition in multi-game subscription services,” such as its PlayStation Plus offering. In the same statement, the entertainment giant claimed that Xbox Game Pass now has over 29 million subscribers.

Earlier this month, the European Union reportedly gave Microsoft a formal antitrust warning over the deal, while on the other side of the pond, the US Federal Trade Commission is seeking to block the merger with legal action of its own.

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