The Wall Street Journal reported Friday that the new Call of Duty will launch on Xbox Game Pass, which marks a significant gamble for Xbox and the latest in a series of moves to determine the future of Microsoft’s gaming division.
Activision, now owned by Microsoft, releases a new Call of Duty every year, which is typically a best-seller. Even lesser-regarded franchise entries like 2023’s Modern Warfare III typically crack the top 3 list for the year, primarily driven by its best-in-class multiplayer modes. According to the WSJ, Microsoft plans to debut 2024’s new Call of Duty at next month’s Xbox Games Showcase, alongside the announcement that it will be available on Game Pass on its launch day.
Microsoft’s bet seems to be that Call of Duty on its Game Pass subscription service will spur a new wave of interest in both the service and in the Xbox as a platform.
That would be a good deal for consumers. While rumors persist that Microsoft will raise the price or add new tiers to Game Pass in the near future, it would still let a single person play the new CoD for a couple of months for less than the $70 cost of the base game.
That could cannibalize the game’s overall sales, however, particularly on the Xbox platform.
In theory, this could also authoritatively confirm or deny Microsoft’s portrayal of the Game Pass service as a “discovery engine,” where players frequently try games before they buy them. This could bring in a new wave of interest from people who might otherwise never have tried a new Call of Duty, or might give a few million casual players an excuse to not buy this year’s edition of the game.
As we learned last summer during Microsoft’s court battle with the FTC over its Activision acquisition, Call of Duty by itself makes up a non-trivial amount of the video game audience. If Microsoft had simply decided to make CoD a console exclusive on Xbox, it would’ve pulled roughly 7 million players away from Sony’s PlayStation 4 and 5 systems.
Instead, the reported plan is to let the game stay cross-platform, but to use it to drive Game Pass subscriptions.
It’s another example of how Microsoft’s recent console strategy has been to redefine the terms of its own success. The company doesn’t discuss how many Xbox devices it’s shipped or individual game sales. The only metric it really cares about, at least in public, is how many people are on Game Pass.
The Call of Duty gamble, if it happens, would be the latest in a series of recent Xbox controversies.
Microsoft’s gaming arm was in good shape at the start of the year. It completed the Activision acquisition, Xbox topped Windows in revenue for the first time, and its major competitors on console didn’t have much left in the tank. Nintendo appears to be winding down the Switch in favor of its as-yet-unannounced successor, while Sony is undergoing an internal reorganization that means it won’t have any new first-party offerings until next year.
Instead of simply relying on its new exclusives to drive sales, however, Xbox announced that it would bring several of its first-party games, such as Sea of Thieves and Grounded, to the PlayStation and Switch.
This seems to have worked out commercially, but did serious damage to the Xbox brand in the process. Microsoft’s earnings report from April showed that Xbox hardware sales had fallen off a cliff.
Microsoft then announced earlier this month that it would shutter several of its studios, all of which were subsidiaries of Bethesda Softworks. This included Tango Gameworks, the Japan-based creators of last year’s cult favorite Hi-Fi Rush; Arkane Austin, which made the much less successful Redfall; and mobile developer Alpha Dog Games.
This was the latest in a series of layoffs and shutdowns that has ravaged the international video game industry for the last 18 months, including 1,900 lost jobs at Xbox in January.
In a May 8 town hall meeting, Xbox Game Studios head Matt Booty reportedly told employees that the department needs “smaller games that give us prestige and awards,” the day after his company had closed the studio behind the small, prestigious, award-winning Hi-Fi Rush.
At best, it makes Booty look like he’s out of touch; at worst, he threw all the fire extinguishers out the window, then complained that nobody had put out a fire.
That’s contributed to an increasing perception from outside Xbox that the company has lost track of what it’s doing. IGN’s Ryan McCaffrey made a compelling case in a May 9 editorial: between the Bethesda and Activision Blizzard acquisitions in 2021 and 2023, the Xbox Game Studios network grew by several orders of magnitude in just two years. As a result, it’s become too big for its own good, and higher-ups at Microsoft have noticed.
Xbox chief Phil Spencer has consistently relied on outside-the-box strategies, to varying degrees of success. Now he presides over one of the biggest gaming companies in the world, but one that needs a substantial reorganization.
It’s unlikely that next month’s Showcase and the attendant Call of Duty reveals are a make-or-break moment for the Xbox project overall. Xbox still makes money, even if it’s constantly stuck in third place behind Sony and Nintendo.
Instead, it’s more likely that Call of Duty on Game Pass will be a final test for Xbox’s current operational strategy. If this falls through, I’d imagine the next move is a big executive shakeup, followed by a series of new initiatives. The upcoming year will either vindicate or vilify Spencer’s time as head of Xbox, which could either take Call of Duty down a peg or lock it in place as the most valuable IP in the modern games industry.
