Microsoft plans to release the upcoming installment of the “Call of Duty” video game on its subscription service, marking a shift from its traditional practice of selling the title independently, according to a source familiar with the matter on Friday. The announcement is expected to be made at the company’s annual Xbox showcase on June 9, the source revealed, speaking anonymously due to the private nature of the plans.
This week, Wall Street Journal also reported that Microsoft intends to add this year’s “Call of Duty” game, likely a new Black Ops installment, to Xbox Game Pass. This move would represent the most significant addition to the subscription service since its inception, aiming to boost subscriber numbers during a period when attracting new subscribers has become increasingly challenging.
Microsoft acquired the “Call of Duty” franchise through its $69 billion acquisition of Activision Blizzard, a deal that was finalized late last year. The first-person shooter video game series is one of the most successful entertainment properties in history, having generated over $30 billion in lifetime revenue.
For years, Activision has released new editions of the “Call of Duty” game annually, each priced at around $70. This traditional approach has been highly profitable, making “Call of Duty” one of the most lucrative franchises in the gaming industry.
The development comes just days after Xbox President Sarah Bond announced at a conference that the company plans to release all first-party Xbox games on Game Pass on their launch day. The six reasons why Microsoft may be adding ‘Call of Duty’ to Xbox Game Pass will be discussed below. Hence, continue reading.
Microsoft operates Game Pass, a subscription service offering access to games from Xbox and various other developers for a fee. The Redmond, Washington-based company has been aggressively expanding this Netflix-style service to challenge the dominance of PlayStation consoles, manufactured by its Japanese rival, Sony Corp.
As of February, Microsoft reported that Game Pass had grown to 34 million subscribers, up from 25 million in 2022. Analysts believe that adding “Call of Duty” — a franchise with a large and dedicated fan base — to Game Pass could attract even more subscribers, though it might impact the traditional sales model for the game.
“Call of Duty: Modern Warfare III,” released in November 2023, ranks as the second-best selling game of the year to date. It follows Sony’s “Helldivers II” in sales, according to industry tracker Circana.
Six reasons why Microsoft is adding ‘Call of Duty’ to Xbox Game Pass
- Maintaining Consistency and Value: By including “Call of Duty” in Game Pass, Microsoft avoids creating exceptions to its “all-in” commitment to the service. Making an exception could alienate loyal subscribers and diminish the perceived value of Game Pass.
- Strategic Sacrifice of Sales: While adding “Call of Duty” to Game Pass may reduce direct sales, the impact is mitigated by Xbox’s relatively smaller market share. Microsoft is willing to sacrifice some sales to boost Game Pass subscriptions, knowing that many Xbox players may still opt to purchase the game outright.
- Microtransaction Revenue: A significant portion of “Call of Duty” revenue comes from post-launch microtransactions, not just day-one sales. These microtransactions will continue to generate substantial income, even with the base game included in Game Pass. Additionally, “Warzone” has already been free-to-play, aligning with this strategy.
- Attracting PlayStation Players: With a limited first-party lineup, Microsoft needs compelling reasons to attract players from the PlayStation ecosystem. Including “Call of Duty” in Game Pass aims to lure hardcore fans to Xbox consoles or PC/cloud gaming, without making the game exclusive.
- Driving Game Pass Growth: “Call of Duty” represents one of the last major opportunities for significant Game Pass growth. Few other franchises, except perhaps “Grand Theft Auto,” could have such a substantial impact on subscriber numbers. The addition of “Call of Duty” could surpass the previous record set by “Starfield.”
- Opportunity for Price Adjustments: Introducing a high-profile game like “Call of Duty” to Game Pass provides an opportunity for Microsoft to justify price hikes or the introduction of new subscription tiers. As the service continues to grow, incremental price increases can be supported by the inclusion of such major titles.
The main question was whether “Call of Duty” would be added to Game Pass this year or next. Despite some internal debate, the benefits ultimately outweighed the drawbacks, making its inclusion inevitable. While it’s uncertain if this move will achieve all of Microsoft’s goals, the decision itself was anticipated.