Microsoft May Exit Gaming Business If Game Pass Subscribers off Console Don’t Increase Enough by 2027

wccftech.com:

Microsoft Gaming CEO Phil Spencer made some remarkable statements on a potential exit from the gaming business. The quotes are extracted from an investigational hearing conducted as part of the Federal Trade Commission's investigation into Microsoft's acquisition of Activision Blizzard.

The document has been released today, revealing plenty of interesting information (including a detailed Bethesda games release schedule from 2020). Here, though, we'll focus on Spencer's remarks on the future of Microsoft's gaming business.

FTC lawyer James Weingarten put the following internal Xbox Game Pass slide in front of Spencer, asking him whether he agreed with the projections that show the subscription service surpassing 100 million users between FY29 and FY30, largely due to an increase in the PC and cloud market.

Spencer said in no uncertain terms that Microsoft could exit the gaming business if this projection became reality. Microsoft needs the light green and blue segments (PC and cloud) to get much larger and much faster by fiscal year 2027, or it could opt out of the business altogether.

I do not believe that that is what the future Xbox business would look like. This is a presentation from our devices organization to the gaming leadership team, so this is the view from the team that is chartered with building our hardware on what the future business would look like.

I can fairly safely say that if we do not make more progress than this off of console, we would exit the gaming business. If this were the outcome, we would -- I don't believe we'd still be in the business.

A majority of our customers are found off of our own hardware, I would hope by earlier than 2030. So, when you asked me if I agreed with this chart that the