Wade Bush Securities Analyst Pachett: Microsoft's Next-Generation Xbox Console is "Dead" Due to XGP

IT之家 news on February 28: Michael Pachter, a strategic advisory consultant at Wedbush Securities, has long been known for speaking his mind and often shares bold views about the gaming industry. According to tonight’s report from the foreign media outlet Wccftech, after changes in Microsoft’s management, Pachter noticeably shifted his stance in an interview. He expressed pessimism about the prospects for the next-generation Xbox console expected to launch in 2027, attributing the reason to the Game Pass strategy: “I think this console ‘is dead.’ Microsoft has undermined the value of the console itself by fully pushing Xbox Game Pass.”

Pachter believes there is a fundamental problem with XGP’s current subscription model: “The problem with XGP is that either you can play everything or you can’t play anything. Pay $30 a month (IT之家 note: at the current exchange rate, about 206.1 RMB), otherwise don’t play these games. Why not sell EA Sports FC to the 100 million people who want to play but don’t want to buy the console? Of course they should do that.”

“If Microsoft did this, I think it would be a success. A $30-a-month subscription model is the wrong direction. The price should be $10 a month (at the current exchange rate, about 68.7 RMB), and you should be able to play all the content. Who would want to pay for a buffet at five times the price of a meal? When a game costs only $70, how can you charge users $360 a year? It should be run like a buffet restaurant—forcing full subscriptions is their mistake.”

Earlier, in 2018, Pachter had said that the existence of loot boxes is because consumers are willing to accept this model. In 2022, he criticized Sony’s decision to pay $3.6 billion to acquire Bungie as overpriced, arguing that compared with Microsoft’s acquisition of Activision Blizzard and Take-Two’s acquisition of Zynga, this deal lacks a reasonable basis. That same year, Pachter also predicted that the inclusion of Activision Blizzard games could boost XGP’s active users to reach 100 million, and in 2024 he further stated that XGP could grow to 200 million users over the next 10 years.