Microsoft's newest console exclusive, Gears of War: E-Day, has generated significant discussion around its commercial performance in its launch week. Initial data from analysts suggests a nuanced reality where direct sales figures do not fully represent player engagement or revenue, largely due to the pervasive influence of the Game Pass subscription service.
According to Rhys Elliott of Alinea Analytics, Gears of War: E-Day has sold approximately 230,000 copies. Of these, 168,000 were on PC via Steam, with the remaining 62,000 sold across Xbox consoles and PC through the Microsoft Store. However, Elliott stressed that these direct sales do not tell the complete story.
Game Pass 'Cannibalizes' Sales
Elliott's analysis indicates that the majority of players acquired E-Day through their Game Pass subscription rather than purchasing it outright. Alinea's data shows that over 1.7 million people accessed the game via Game Pass. Further complicating the sales narrative, 722,000 of these Game Pass subscribers opted for the $30 Premium upgrade, which offered early access and bonus content. This upgrade path means that nearly 950,000 individuals paid something for the game, either directly or through the upgrade. Consequently, Xbox accounts for a substantial portion of the revenue, estimated at around $26 million from these paid engagements, compared to approximately $11 million on Steam, despite fewer direct sales on Microsoft's platforms.
Elliott described these figures as "soft numbers" for a period when "Xbox badly needs revenue wins." He noted that the full-priced $70 edition of E-Day is "functionally dead on Xbox" due to its Game Pass availability. He argued that in a scenario without day-one Game Pass inclusion, many of these players would have likely purchased the game at full price. "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," Elliott stated.
Game Pass Crossroads
While Game Pass is a significant source of recurring revenue for Xbox, bringing in nearly $5 billion in the last fiscal year, its growth appears to be stagnating. Xbox CEO Asha Sharma has acknowledged that Game Pass was a major bet that did not yield the expected results, stating, "Our core business weakened, and we added more teams, more investment, and more time, hoping for a better outcome." This strategic shift has led to major changes within Xbox's Game Pass offerings, including the removal of major day-one releases. Now, new titles are typically not included at launch, requiring players to purchase them or wait a year for their inclusion on the service.
Elliott suggested that when a highly-rated game like Gears of War: E-Day performs modestly on its primary platform, it calls the underlying business model into question, rather than the game itself. Mat Piscatella of Circana offered a counterpoint, reminding observers that Game Pass revenue is not entirely divorced from E-Day's availability, as subscribers pay a monthly fee for the service. He also noted that not all Game Pass players would have bought the game if it were not available on the subscription service.
Exclusivity and Future Prospects
Speculation regarding a potential PlayStation 5 version of E-Day has persisted, fueled by past Microsoft documents and the previous release of Gears of War: Ultimate Edition on PS5. Reports of a PS5 edition being canceled at the last minute were denied by Microsoft, though skepticism remains. Xbox's Aaron Greenberg stated that E-Day is not a timed exclusive for Xbox, but this claim has been met with caution given past experiences with titles like Starfield.
Elliott believes that Xbox's exclusivity strategy, including titles like Gears of War: E-Day and Clockwork Revolution, is a failing endeavor. He argued that exclusive games will not significantly drive console sales, especially given the higher cost of hardware development and the availability of these games on PC. "Console as we know it is over for Xbox–and has been for a while. There’s no turning that ship," Elliott said, suggesting that Microsoft is prioritizing a transition to other growth areas rather than focusing on console dominance. He characterized E-Day and Clockwork Revolution as "sacrificial lambs for hearts-and-minds, not economics."
Regarding the future of the Gears franchise, Mike Crump of The Coalition stated that E-Day provides a "great foundation" for sequels, potentially enabling faster development cycles. The studio currently has no other publicly announced games in development. Microsoft acquired the Gears of War franchise from Epic Games in 2014. These developments occur amidst significant restructuring at Xbox, including layoffs, studio closures, and game cancellations, as Sharma aims to "reset" the business for growth.