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Everyone is frothing about Gears of War E:Day again, but this time it’s not the culture war.
These are sensationalist reports about its budget and retail sales. Headlines claim the game cost a staggering $500 million, while other reports suggest it sold “only” 400,000 copies at retail. Predictably, the terminally ill online comment machine is in full force, with some quite wildly blaming Xbox fans for this failure.
Xbox fans demanded exclusives, and yet when push came to shove, “the fans didn’t put their money where their mouth was”, making Gears of War: E-Day’s reported failure “their fault”. It’s a neat and tidy narrative for console warriors, but one that’s completely disconnected from the modern gaming economy outside of the social media bubble.
First of all, that $500 million figure requires some crucial context before anyone uses it as a stick to beat the game.
As Derek Reese, former senior product manager of Xbox Game Creator Services, clarified, this cost is not simply the game’s direct production budget. Much of this figure comes from vast operational costs, with the Coalition essentially required to fund Microsoft’s in-house custom branch of Unreal Engine and support the engine’s integration into the wider Xbox Studios network (a tech debt burden similar to that of Turn 10 carrying the operational costs of ForzaTech, on Fable and Forza Horizon). Conflating the general operational costs of engine R&D with the direct cost of developing a single game represents a misleading omission in the larger narrative.
Beyond the budget talk, expect Xbox players to subscribe to Game Pass Ultimate at $22.99 per month and an annual commitment of more than $275, AND deposit $70 on the first day it is both unrealistic and absurd for every proprietary title to simply support traditional sales metrics. The suggestion that players have to pay twice to prove they support a studio fundamentally misunderstands why Microsoft built this system in the first place.
Xbox Game Pass Ultimate is not a free game
For what many spend on an Xbox Game Pass Ultimate subscription, at standard retail, that’s the cost of about four AAA games at $70 at full price. When a player opts into the Game Pass ecosystem, they are effectively paying for their lineup of games in advance. Expecting that same consumer to purchase Gears of War E: Day at retail price to satisfy outdated quarterly sales charts ignores the basic economic contract of a subscription service. The whole value proposition of Game Pass is that you don’t have to shell out $70 every time a major title arrives.
Not only that, but portraying Game Pass users as passive freeloaders ignores key data we already know. Under oath during the FTC proceedings, then-Xbox President Sarah Bond revealed that Game Pass subscribers spend on average 20% more money on games than those who don’t subscribe.
I, too, begged fans to “walk the talk” for teams sold by Microsoft like Undead Labs. There’s a clear distinction between asking gamers to support an in-house Microsoft studio, whose quarterly profits are in the tens of billions, and supporting new independent Undead Labs. Players who are financially capablecould buy State of Decay 3 to stick it on Microsoft’s bean counters and show Xbox what they had just given up on.
The Coalition is a victim of Microsoft’s structuring. Putting them under the purview of Unreal Engine across multiple games, in collaboration with Epic Games, while creating a multi-faceted multiplayer title mashed under Call of Duty: MW4, World of Warcraft: Forever, Grand Theft Auto 6, and various other heavy hitters this quarter is pure madness.
In just two months, players were offered to choose between massive titles across every sub-genre: Marvel’s Wolverine, Silent Hill: Townfall, Minecraft Dungeons 2, Ace Combat 8, and major remasters like The Witcher 3: Wild Hunt and Dynasty Warriors 3 Complete Edition.
Expecting a single game to generate record $70 direct sales during one of the most crowded and exhausting launch windows in recent gaming history is wishful thinking. In a climate where gamers are already sorting out their spending, a Day 1 Game Pass entry was an incredibly convenient and less expensive way to play E-Day.
The $70 SKU died on Xbox and $30 upgrades replaced it.
Either way, just citing 400,000 units sold or focusing on Steam copies gives a largely misrepresentation of the actual paying audience. Game Pass subscribers have actually engaged massively in the game’s revenue model thanks to the $30 Premium Edition upgrade. It’s much easier to justify in terms of a purchase when you feel like you’re already getting something of value with your subscription.
How many would have spent NOTHING on the game without it being on Game Pass? How can we actually predict this behavior? There’s no “alternate reality generator” to see how the game would have fared in a universe without Game Pass, GTA 6 or the rest.
The $70 premium SKU is, for all intents and purposes, functionally dead for first-party titles on the Xbox console. But it’s not because Xbox gamers refuse to spend money; that’s because Microsoft trained them to spend money on early access add-ons rather than $70 for a standalone license.
The same people attacking Xbox Game Pass are probably the same kind of people happy to wait for Steam sales, which also contributed to the rejection of the $70 retail model. That’s before we even talk about free-to-play titles like Fortnite, Roblox, mobile games and others that actually dominate spending.
For many of these people, making fun of gamers who use the exact monetization model that Xbox designed for them represents a blatant double standard.
Exclusivity is a marathon, not a sprint.
The second major flaw in the current discourse is the demand for seemingly instant gratification. Asha Sharma positioned Gears of War: E-Day and Clockwork Revolution as console exclusives during this year’s Xbox Games Showcase as a sort of olive branch to the community. A signal that platform exclusivity was still a key priority for Xbox. But a game was never going to turn around hardware sales overnight. The reality of today’s market comes down to demographics and household finances.
Just a short story from my own experience showing a co-worker E-Day running an Xbox ROG Ally X during a train ride to work. He was blown away by the visuals and fondly remembers purchasing an Xbox console specifically for the original Gears of War. But today, as he told me, he has a PS5, a mortgage and a family. Knowing that E-Day isn’t on PlayStation was a disappointment for him as he was genuinely interested in the game, but spending a lot of money on a secondary console for a single game is simply no longer a justifiable household expense for him.
Such decisions are no longer made impulsively based on the age and demographics of Xbox’s targeted console users. Hardware dynamics will not be rebuilt with a single flagship release; it must be a slow, steady rebuild over years of consistent, uninterrupted success. As a family, we’ve discussed purchasing a Nintendo Switch 2, motivated in part by the launch of Ocarina of Time, but that alone isn’t a deciding factor; we will have access to Pokopia, Mario Kart, Donkey Kong Bonanza, etc. – so many exclusives that make it a more justifiable expense and from which the whole family can benefit.
Expecting E-Day alone to magically reverse years of cross-platform strategy shift and hardware decline in a single month is incredibly short-sighted. One game won’t persuade someone to change ecosystems, but four or five over a two-year period might. Rebuilding brand trust requires patience, something that’s missing from the Internet comment cycle and something that Microsoft has notoriously lacked in the past.
The danger of short-sighted pivots
If Microsoft interprets E-Day’s early retail sales as a failure of exclusivity rather than a predictable result of its own subscription strategy and timing, they risk making another premature course correction, so for their own sake, I hope they ignore the current rhetoric.
Niche IPs or brand new IPs like Clockwork Revolution alone won’t shake things up either. What’s really needed, if they have the appetite, is exclusivity around massive, platform-defining pillars; the times when a game like The Elder Scrolls 6 is kept strictly within the Xbox and PC ecosystem are what might actually make casual gamers re-evaluate where they play.
I don’t even think about something like Elder Scrolls 6 alone would, but if it’s preceded by a bunch of other exclusives, it might.
Game Pass was designed to change the way gamers consume games. Blaming the player base for using the service exactly as advertised is a bizarre double standard. Many players paid out of pocket for the E-Day premium upgrade on top of their subscriptions. If Xbox wants to prove that exclusivity still matters, it needs to give the strategy some breathing room.
And virtue signaling experts should stop expecting players to buy a subscription first and “wait for a sale” to buy a $70 retail model. They were told repeatedly and explicitly that they didn’t need it.
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