Microsoft forfeited more than $300m in Call of Duty unit sales on Xbox and PC last year by including the game in Game Pass at launch, according to a Bloomberg report citing internal estimates from a former Xbox employee.
The figure represents opportunity cost rather than an actual financial loss. It reflects sales that likely would have happened if players had to buy Call of Duty outright instead of accessing it through their existing Game Pass subscriptions.
This estimate doesn’t include PlayStation sales, which Microsoft still collects separately. The company continues to sell Call of Duty on Sony’s platform as part of regulatory commitments tied to its $69bn Activision Blizzard acquisition.
Game Pass hasn’t delivered the growth Microsoft expected after closing that deal in October 2023. Industry analyst Joost Van Dreunen told Bloomberg the service underperformed post-Activision and that its infrastructure costs don’t align with current pricing.
Microsoft has responded to these pressures by restructuring Game Pass multiple times over the past two years. The company introduced a new Standard tier without day-one releases, raised prices across remaining tiers, and pushed Ultimate subscriptions to around $30 per month in some regions.
Call of Duty: Black Ops 6 was the first entry in the franchise to launch day-one on Game Pass under Microsoft ownership. The move significantly boosted player counts and engagement but appears to have cannibalized a substantial chunk of direct sales on Xbox and PC platforms.
Microsoft maintains that Game Pass remains profitable, reporting nearly $5bn in revenue for the fiscal year ending in June. However, the company has been notably quiet about subscriber counts since early 2022, instead highlighting revenue milestones and PC growth.
The Bloomberg report sheds light on the tension between Microsoft’s subscription strategy and traditional game sales. Call of Duty historically tops sales charts each year and generates billions through premium purchases, battle passes, and in-game cosmetics.
The subscription struggle
Day-one releases of major titles were meant to drive Game Pass growth and lock players into the Xbox ecosystem. But the strategy appears to come with significant trade-offs, particularly for tentpole franchises that would sell millions of copies at full price.
Unlike streaming video where users consume dozens of titles monthly, gamers typically focus on a handful of games per year. This behavior makes the Netflix-style subscription model harder to execute profitably in gaming, especially when expensive AAA titles launch into the service immediately.
