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Microsoft’s latest console exclusive, Gears of War: E-Day, launched this week, and now we’ve gotten the first glimpse at how the game is performing commercially. Multiple analysts have weighed in, and there are numerous factors at play beyond pure sales, due to Game Pass and other factors. So let’s break things down.
Rhys Elliott of Alinea Analytics released a report that said the game has sold about 230,000 copies so far, with Steam sales accounting for 168,000 and Xbox (across console and PC) making up the other 62,000.
Straight sales do not tell the whole story, though, because E-Day is available on Game Pass, which Elliott said “cannibalized” the majority of sales. He said Alinea’s data showed than 1.7 million people acquired E-Day through their Game Pass subscription as opposed to buying a copy outright.
There is more nuance there, too, as Elliott said that 722,000 of the 1.7 million people who played E-Day through Game Pass bought the $30 Premium upgrade, which got them in early and awarded them with extra content.
“So despite selling far fewer copies on Steam, Xbox accounts for almost three-quarters of the revenue (roughly $26 million of the $37 million, versus about $11 million on Steam). So ‘230,000 copies’ undersells the paying audience. Including the 722,000 upgrades, nearly 950,000 people actually paid something for E-Day.”
Elliott concluded that these are “soft numbers” at a time “when Xbox badly needs revenue wins.” In this environment, Elliott said E-Day’s $70 edition is “functionally dead on Xbox.”
“In a world without day-one Game Pass, many of these folks would have bought E-Day at $70. They paid $30 for five days early access to something they don’t own. Xbox is, in effect, charging its most valuable customers the least, based on a hangover from a tried-and-exhausted strategy from a previous administration,” he said.
More to the story
Game Pass creates recurring revenue for Xbox, and it’s big business. For the latest fiscal year, Game Pass brought in nearly $5 billion in revenue. E-Day’s inclusion on Game Pass adds value to the service for Game Pass members.
However, Elliott said Game Pass is no longer growing, putting Xbox “at a crossroads.” Xbox CEO Asha Sharma has alluded to this as well, saying Game Pass was one of Phil Spencer and Sarah Bond’s big bets that did not pay off.
“Our core business weakened, and we added more teams, more investment, and more time, hoping for a better outcome,” she said.
Microsoft spent many billions of dollars acquiring numerous developers with the aim of funneling content to Game Pass. The strategy did not work, and now Xbox has made major changes to Game Pass, including removing the biggest day-one new release it ever had in the Call of Duty franchise. New releases are no longer included at launch, so players have to buy them outright or wait a year until they come to Game Pass.
“When a game this bloody awesome and well-reviewed [Gears of War: E-Day] does this softly on its home platform, the model–not the game–gets brought into question,” Elliott said.
Mat Piscatella of Circana reminded people that E-Day’s revenue was not totally cannibalized in practice through its inclusion on Game Pass because a person had to pay $23/month for Game Pass in the first place. Beyond that, Piscatella pointed out that that not everyone who played E-Day through Game Pass would buy the game outright if that was the only way.
What about a PS5 version?
Many people expected Microsoft to release E-Day on PS5, in part because Microsoft’s own documents showed that a PS5 version was in the works and because Gears of War Reloaded came to PS5 a year ago.
A PS5 edition of E-Day was reportedly canceled at the last minute; Microsoft denied this, but no one believes that. Microsoft’s Aaron Greenberg has said E-Day is not a timed exclusive for Xbox, meaning it may never come to PS5. However, he said the same thing about Starfield, and then it came to PS5, so people are understandably hesitant to believe what the company says.
Elliott previously said Gears of War: E-Day (along with Clockwork Revolution) are being sent out to die due to their exclusivity to Xbox. They are also coming to PC, but not PS5.
Elliott told GameSpot that Microsoft will never succeed in the console space and promising fans exclusive games to help drive console sales is not going to make a difference.
“Console as we know it is over for Xbox–and has been for a while. There’s no turning that ship. But they still need to pretend to care until they’ve transitioned to pastures where they can return to growth (if they succeed),” he said.
“A Gears console exclusive does not shift meaningful numbers of Series X units. Exclusivity as a hardware-driver is over for them, because the install base it would drive simply isn’t responsive enough to justify the cost of building hardware at a 5x component premium. And those games are on Steam anyway,” he added.
Elliott went on to say that Gears of War: E-Day and Clockwork Revolution are “sacrificial lambs for hearts-and-minds, not economics.”
E-Day sequel possibilities
Will there be a sequel to E-Day? That remains to be seen, but The Coalition’s Mike Crump said E-Day creates a “great foundation” for the franchise to grow. Crump also stated that a potential sequel could be made much faster. The studio has no other games in development that have been announced publicly.
Microsoft bought the Gears of War series from Epic in 2014 for an undisclosed sum.
There have been big changes at Xbox lately as part of Sharma’s effort to “reset” the Xbox business and help it grow. This has included mass layoffs, studio closures, and game cancellations. Recently, Sharma said Xbox was at an “all time low” but is now growing again, though she didn’t provide any data to support her claims.
