By acknowledging that titles introduced to Xbox Game Pass really sell fewer copies, Microsoft has put itself in a bit of a pickle.

Microsoft made the disclosure as part of its conversations with the UK Competition and Markets Authority (CMA) about the Activision Blizzard merger, according to GamesIndustry.biz’s report(Opens in a new window). Yet, as Xbox head Phil Spencer said in 2018, according to Eurogamer(Opens in a new window).

Spencer said at the time:

“A game like Forza Horizon 4 gains more players right away when it is added to Game Pass, which really increases game sales. Aren’t they all simply going to pay the $10 subscription fee and play this game, you ask? But instead, players choose games depending on what their peers are playing Capybara Clicker.”

Microsoft also submitted that its own study reveals a [redacted]% reduction in basic game sales twelve months after their inclusion to Game Pass, the CMA said in its preliminary findings from last week.

While the precise proportion is not made public, it still qualifies as an open admission that titles included in Xbox Game Pass will have lower initial sales.

Microsoft has acted promptly to explain their stance, as you would anticipate, by making the following statement available to Euorgamer today:

“Xbox Game Pass gives players and game developers new options and opportunities for how to find, play, and distribute games. For gamers, it means giving them a another avenue for cheap multiplayer gaming with pals. For developers, this means coming up with a different method for monetizing their games.

We are committed to assisting game developers of all sizes in maximizing the overall financial benefit they get from Game Pass. As every game is different, we work together with developers to create a special program that takes into account their requirements, ensures they are paid for using the service, and leaves space for creativity and innovation. As a consequence, more developers are becoming interested in collaborating with Game Pass.”

Nothing in the statement disputes the claim made to the CMA, and it would be unexpected if Microsoft did given that it makes sense less games are being sold. Gamers who subscribe are far less inclined to pay another $60 to purchase a game they already own if you include a $60-$70 game as part of your monthly subscription.

It does, however, raise the issue of whether Microsoft can continue to finance several first-party games, offer them on Game Pass on the first day, and make a profit. More money will be made if a million copies of a game are sold for $60 as opposed to if the same game is downloaded and played by a million subscribers who already pay $25 per month. True, consumers could pay $300 for a year’s subscription, but in exchange they want access to hundreds of titles and a constant stream of novel experiences. All of it costs money, and as Microsoft has recently acknowledged, it all results in lower game sales.