The Microsoft Exec recently provided an interview where it was shared that the gaming subscription service is doing better than some might think. There has been some doubt about the sustainability, and more importantly, the profitability of Xbox Game Pass. With its day-one promise to bring games to the service on their release day and low-priced options, it would seem as if Microsoft is giving the farm away. While the majority of the interview with Game Watch (via Twisted Voxel) focuses on Microsoft’s collaboration with ASUS for the ROG Xbox Ally gaming handheld, there is a moment where Bond was asked about Xbox Game Pass. It was then that an impressive sales number was revealed.
“Last fiscal year, Xbox Game Pass sales reached a record high of $5 billion.”
-Sarah Bond, Xbox President
Another concern with the Xbox Game Pass business model is whether or not game creators/developers are being properly compensated. After all, if a game is available to play for free (albeit sans subscription fees) on release day, the argument goes that players could decide to forgo buying it. However, the other side of that same argument is that if players enjoy the title, they may choose to purchase it afterward. Meanwhile, there’s a perceived risk to both Microsoft and the game creators regarding whether either is reaping profits from the service.
“It’s a profitable business, and as more creators join Xbox Game Pass, payments to creators increase, so we think it’s a good business for creators.”
-Sarah Bond, Xbox President
Although these statements do not fully clarify the fiscal state of Game Pass, it does seem as if things are moving in the right direction. Bond also emphasizes that Xbox is working to establish more partnerships with developers to bring more titles to Game Pass. The exec provided the interview while in Japan in preparation to attend the Tokyo Game Show, where she also shared that meetings would take place while there.
“We are building relationships with many well-known game creators in Japan and across Asia, and we are thrilled that they are willing to collaborate with us and actively ship their games on our platform.”
-Sarah Bond, Xbox President
It’s clear that, between increasing its partnerships with game creators and expanding its presence in the gaming handheld market, along with improved Windows integration for Game Pass and cloud gaming options, Microsoft has a focus on continued growth and support for Game Pass.
Discussion (4 replies)
Join Discussion →Doesn't seem to disclose anything. They could take in 5 billion and bleed out 6 or more. Who's to say. Need to look at a Financials report that breaks down earnings and costs per segment.
Meanwhile, back at the ranch . . .
[URL unfurl="true"]https://videocardz.com/newz/gamers-say-pass-to-game-pass-after-ultimate-tier-price-hike-to-30[/URL]
It's going to be a balancing act for sure.
Increased cost by 10 bucks a sub... looses... 10% of subs... so cost increase or 33% to the remaining 90% of subscribers is still a win for MS.
BUT... if they loose more than roughly 30% of ultimate tier subscribers (lets presume they just swap to a lower tier.) then their value proposition had an inverse affect... but that may be offset that the higher cost Ultimate tier sub offsets a higher payout to partners and publishers to give day 0 access to games... then that's honestly a different story. AND could draw more subscribers to give MS the chance to have day 0 launches on THEIR platform over others.
If that happens then studios and or publishers would need to look at the benefits of going with Microsoft's services as opposed to Sony, Steam, Ubisoft, or whatever... Could create more spin for MS and their subscription platform to garner more money for studio's and more players and payers for the Ultimate tier...
And another interesting twist... I wonder what that does to those that purchased a xbox series x from Walmart on a payment plan that included the Ultimate subscription as part of the package. I looked into it for a friend once and it was like 37 bucks a month for 2 or 3 years. Seems if they are still running that in store it would become even better of a deal because your effective cost for the xbox would be 7 bucks a month for three years. 172 bucks? Again if they are still doing that or haven't adjusted the pricing for those people.
Microsoft atlast has tons of games.
Buy this is the precise time that they increased prices
This is not a coincidence !!
In a move towards the cloud, Microsoft increases game pass prices
Cloud gaming seems integral to future gaming strategy — from 2027 onwards
(After all Nadella was the Azure head before becoming CEO)
[URL unfurl="true"]https://insider-gaming.com/microsoft-tries-to-defend-xbox-game-pass-price-increase/[/URL]