Analyst: Game Pass Will Cannibalize Most Gears of War: E-Day Revenue on Xbox

Gears of War: E-Day may be one of Microsoft's biggest releases of the year, but a new analyst report suggests the game's inclusion in Xbox Game Pass will significantly undercut its revenue potential on the console. Rhys Elliott of Alinea Analytics said in a report published today that «most» of the money the game could earn on Xbox will be «eaten up by Game Pass,» according to his analysis.

Elliott's data shows that E-Day has already surpassed 120,000 copies sold on Steam, generating more than $7 million in revenue. That figure is more than double what Halo: Campaign Evolved sold over a comparable period. Despite the strong start on Valve's platform, Elliott said the game is unlikely to ever reach 1 million copies sold on Steam. The game launches on October 6, though players who pay extra can begin playing on October 1.

The analyst's assessment highlights a broader tension inside Microsoft's gaming strategy. The company has spent billions of dollars acquiring studios to funnel content into Game Pass, betting that a subscription model would drive growth. But new Xbox CEO Asha Sharma has acknowledged that the bet 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 itself admitted in 2023 that putting games into Game Pass cannibalizes full-game sales.

Microsoft has already begun pulling back. The company's Activision division no longer places new Call of Duty games into Game Pass at launch, with this October's Modern Warfare 4 not arriving on the service until Fall 2027. Sharma has said Xbox might «window» other titles in the future, presumably to capture more revenue from direct sales. Still, Elliott noted that Game Pass inclusion can encourage new subscriptions, so raw sales figures do not tell the entire story.

Elliott also addressed the rumored PlayStation 5 port of E-Day, which Microsoft reportedly canceled. He argued that Microsoft should not have done so, as a PS5 release would have «added some much-needed extra revenue.» While E-Day may not come to PS5 at launch, Elliott expects a port to arrive «at some point.» Microsoft denied canceling a PS5 version at the last minute but did not deny that one existed. Adding to the confusion, Microsoft's Aaron Greenberg has said E-Day is not a timed exclusive for Xbox, though Greenberg made a similar claim about Starfield in 2021 before that game eventually came to PS5.

Elliott has been sharply critical of Microsoft's console strategy. He previously said E-Day and Clockwork Revolution are being «sent out to die» due to Xbox exclusivity, noting that both are also coming to PC but not PS5. «Console as we know it is over for Xbox—and has been for a while. There's no turning that ship,» he told GameSpot. «A Gears console exclusive does not shift meaningful numbers of Series X units. Exclusivity as a hardware-driver is over for them.» He described the two games as «sacrificial lambs for hearts-and-minds, not economics.»

For Microsoft, the stakes extend beyond a single title. The company is trying to balance a subscription service that offers day-one access to major games against the need to generate direct sales revenue. With E-Day's early access period beginning October 1 and the full launch on October 6, the coming weeks will offer the clearest signal yet of how that balance is holding up.

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Connor Quincy

Technology Reporter

Connor Quincy covers public affairs, politics, business, culture and daily news for Core Memo. The role focuses on verification, context, and clear explanations for readers.

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