Circana senior analyst Mat Piscatella has publicly spoken out about the reasons behind the weak subscriber growth of Xbox Game Pass. In his view, the service is unlikely to significantly expand its audience in the near term. The problem, the expert argues, lies not in content quality or marketing, but in the very nature of the subscription model as applied to games.
What Xbox Is Looking For Now
Xbox executive Asha Sharma is trying to understand why interest in Game Pass is fading. She faces the task of finding solutions capable of restoring subscriber base growth and improving the service’s profitability. It is against this backdrop that Piscatella’s assessment has emerged — one that effectively calls into question the company’s core strategic bet.
The “Netflix for Games” Model Turned Out to Be a Trap
Piscatella recalls that the Game Pass concept was once articulated by former Xbox head Phil Spencer, who described the service as “Netflix for gamers.” The company invested enormous resources in expanding its catalog and even acquired entire studios to fill the library. However, as the analyst argues, the bet on the idea of “subscription instead of purchases” and inflating the catalog did not resonate with the mainstream gamer, who simply has no need for access to hundreds or thousands of titles.
The Average Gamer Only Has Time for a Couple of Games a Year
Piscatella’s argument rests on straightforward everyday arithmetic. Most users pick one or two games a year, or spend all their free time in a single “live-service” game. For such people, a monthly subscription ends up costing more than a one-time purchase at full price or at a discount during a sale. A model that works brilliantly for films and TV series — where a viewer can consume dozens of hours of content in a month — stumbles against the specific nature of gaming consumption.
Another factor is worth considering: in recent years, a portion of gamers has increasingly been switching to adjacent formats of interactive entertainment. Streaming platforms, online quiz games, and live game shows are gradually drawing attention away from traditional video games. According to livegameshows.org, the popularity of live game shows has grown noticeably, with a significant share of their audience consisting of people who previously spent their evenings at a console or PC. For subscription services like Game Pass, this means competition not only with other games but also with fundamentally different ways to spend a free hour. In such a situation, convincing a user to pay every month for a catalog of titles becomes even harder.
Enthusiasts Exist, but They Won’t Deliver a Mass Audience
According to the analyst, Game Pass has managed to attract the most dedicated hardcore fans — people who genuinely play a large number of titles and derive real value from the subscription. However, it is precisely the limited size of this segment that prevents the service from reaching tens, let alone hundreds, of millions of subscribers.
Major Releases and Indie Games Didn’t Help
Xbox has consistently tried different approaches to attracting audiences. Initially, the company emphasized big premieres, expecting that high-profile titles would act as a magnet for new subscribers. The focus then shifted to conceptual indie games. Piscatella concludes that both paths proved ineffective.
The Analyst Sees No Easy Way Out
The task of transitioning the gaming business to a subscription model — in line with other Microsoft products — has effectively exhausted its set of workable tools. “They’ve already tried pretty much every option that could have worked,” Piscatella notes, acknowledging that he cannot see an obvious solution.
What Sharma’s Team Is Doing
Regardless of the analyst’s skeptical assessment, Xbox continues to experiment. Among the company’s recent moves, several directions stand out.
– **Reducing the subscription price.** One of Asha Sharma’s first decisions was to lower the cost of Game Pass. At the same time, the company is limiting the addition of major new releases to the subscription. In particular, there have been reports of delayed inclusion of new Call of Duty titles.
– **Free cloud gaming with ads.** Xbox is testing a free cloud gaming model in which an ad of approximately two minutes is shown before a game launches.
– **Layoffs and studio closures.** The company laid off around 3,200 employees and closed four studios. At the time of the announcement, it was emphasized that no games had been cancelled.
Results Won’t Be Clear for at Least a Year
Too little time has passed since the launch of the new initiatives to assess their real impact. The price reduction and the ad-supported cloud gaming format have not yet had a chance to show up in the overall picture. Analysts and observers agree that understanding whether Sharma’s measures have worked and whether Game Pass momentum has shifted in a positive direction will not be possible for at least another year.
