Game Pass subscription goals fell short of Microsoft’s company goals, according to a new financial presentation from the tech giant. According to a report from Axios, Microsoft targeted a 73% gross rate for Game Pass during the last fiscal year, which ended June 30, 2022. Instead, the service grew 28%.
These goals are tied to Microsoft CEO Satya Nadella’s salary. The company also failed to hit a similar marker in fiscal 2021. However, in fiscal 2020, Game Pass subscriptions exceeded expectations. Other targets that would impact CEO salary include Microsoft Cloud revenue, Teams usage, and LinkedIn sessions. Overall, Nadella was paid $55 million in stock and cash.
At the Wall Street Journal Tech Life Event, Microsoft Gaming CEO Phil Spencer said Game Pass is profitable and PC subscriptions are seeing strong growth, though console subscriptions are slowing. He also alluded to possible price increases after the holiday season. Xbox Game Pass is currently $9.99 a month for PC or Console. Game Pass Ultimate, at $14.99 per month, is a bundle that includes the game pass for PC and console, as well as Xbox Live Gold. Microsoft does not publish any sales data related to Game Pass. However, he announced in January 2022 that the service had reached 25 million subscriptions.
The market power of Game Pass has been a key part of Sony’s objections to Microsoft’s ongoing acquisition of Activision Blizzard. The UK Competition and Markets Authority echoed Sony’s concerns, leading to a counter statement from Microsoft. Last week, an anonymous shareholder sold a large amount of Activision Blizzard stock, reflecting a possible lack of confidence that the deal would go through.
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