Video gaming subscription growth has stalled according to analysts

Despite subscription services such as Xbox Game Pass and Ubisoft+ becoming a common sight within the gaming industry, it appears that their growth has slowed dramatically compared to last year.

The details:

• According to Mat Piscatella, Executive Director and Video Game Industry Analyst at Circana, a company that provides consumer behavior advice and analytics, spending on gaming subscriptions in the United States stalled in April. Spending on services increased by only 2% in April 2023 compared to April 2022, as companies struggled to find new subscribers "beyond the console ownership base.”
• Circana's Games Market Dynamics reporting also reveals that "big new premium releases" this year have performed very well regarding traditional sales, especially on digital storefronts. Piscatella also mentioned that physical sales were necessary for some titles, such as The Legend of Zelda: Tears of the Kingdom, which was the franchise's fastest-selling title.
• ID@Xbox head Chris Charla responded to concerns about Game Pass and its impact on the industry and game sales in April. He stated that, while it was "perfectly normal, natural, and healthy" to be concerned about the model's success up to this point, the situation is similar to when free-to-play began to gain popularity, and that purchasing games will always be the more popular option. In the long run, Charla may be correct, with players using the "additive" model to get discounts on titles they enjoy playing on the respective subscription services.

Other Microsoft news:

• The Federal Trade Commission (FTC) fined Microsoft $20 million for illegally collecting and retaining children's personal information for years. The data was collected during the Xbox Live sign-up process, which requested a mobile phone number and other personally identifying information before parental consent.
• As part of its pursuit of the publisher, Microsoft may withdraw Activision's operations from the UK. The UK's Competition and Markets Authority (CMA) blocked the merger in April and claimed it would give Microsoft too much control over the cloud gaming market. Microsoft has since appealed the decision. If the CMA's ruling is not reversed, Microsoft may relocate its operations to mainland Europe and serve the UK through a distributor.