Xbox unsure if adding Call of Duty to Game Pass is a good idea

Xbox's top brass are reportedly conflicted on whether or not new Call of Duty titles should launch on Game Pass.

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Something as big as Call of Duty on Game Pass could skew things quite a bit, and in ways that Microsoft can't fully predict. The megaton shooter franchise is worth over $31 billion, but all of those earnings started with one thing: Premium game sales. Including Call of Duty on Xbox Game Pass will lead to fewer game sales--a replacive effect referred to as "cannibalization." Who's going to spend $70 on Call of Duty when they can play it for $17, or maybe even $25?

This is the exact reason that Activision Blizzard never included its games on Game Pass in the first place. Microsoft would have to pay quite a bit to make up for the potential impact on sales, and other publishers have reportedly referred to Game Pass as 'value destructive'. Consumers typically enter ABK's biggest games through a point of sale, especially Call of Duty.

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And Call of Duty has sold lots of games:

• The franchise has sold over 425 million copies as of June 2022, before the release of Modern Warfare II. Activision managed to sell over 25 million Call of Duty games in one year.
• Call of Duty Vanguard, the game that missed Activision's expectations, still managed to sell 30 million copies.
• Modern Warfare 2 earned $1 billion in full game sales alone in its first 10 days of availability.

How would those sales be possible if Call of Duty was on Game Pass?

Granted, Xbox isn't the top platform for Call of Duty, and Microsoft's platform was apparently beleaguered enough in Activision's eyes to force Microsoft to agree to an 80-20 split in Activision's favor for all future Call of Duty royalties on Xbox.

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This is the dilemma that Microsoft faces with its Game Pass policy, which sees all first-party Xbox games launching on the service the day of release.

But up until now, there hasn't been anything as big as Call of Duty on the service for a consistent amount of time (one game that comes to mind is GTA V's various fleeting forays onto Game Pass, but the game never stayed permanently).

New reports from The Verge's Tom Warren indicate that Xbox management has had internal debates about whether or not Call of Duty's new releases should be on Game Pass at all. Given the small snippets of info I've provided above, I can't say there will be an easy answer to this significant problem.

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Recently, Xbox also prioritized full game sales. Microsoft has broken first-party platform exclusivity in key games like Sea of Thieves, Grounded, Hi-Fi Rush, and Pentiment in a bid to sell more games on PlayStation and Nintendo Switch.

The plan is working very well. Microsoft has taken over the top-sellers liston the PlayStation Store in the U.S. for weeks now, and some of these games are frequently on the list.

Will Xbox diminish the value of Call of Duty simply by reducing the amount of games it sells, or can Microsoft unlock the full potential of Call of Duty through digital-based subscriptions and long-term engagement models? Only time will tell, but I expect that there will be some growing pains and unpredictable consequences to COD's inclusion on Game Pass.