Phil Spencer, the CEO of Microsoft Gaming, recently talked about all things Xbox during The Wall Street Journal’s Tech Live event including conversations about Xbox Game Pass, competitors, future plans, and more. Part of those Xbox Game Pass talks ended up addressing a concern (or a critique, for others) that some have held against Xbox Game Pass by suggesting that the model of giving away so many free games via a subscription model couldn’t possibly be profitable. Spencer addressed that question in passing during the event by confirming that the service was indeed profitable while also offering some insights into the portion of Microsoft Gaming’s revenue Xbox Game Pass contributes to.
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Spencer said during the event (as reported by The Verge) that “it’s profitable for us” in regards to Xbox Game Pass. He went on to say that Game Pass accounted for about 15% of revenue for Microsoft Gaming.
“Game Pass as an overall part of our content and services revenue is probably 15 percent,” he said. “I don’t think it gets bigger than that. I think the overall revenue grows so 15 percent of a bigger number, but we don’t have this future where I think 50–70 percent of our revenue comes from subscriptions.”
This quote’s been passed around in several Xbox circles now with many pleased to finally have some official statement to point to regarding the profitable nature of Game Pass. Others attested that it was of course always profitable given that Xbox keeps investing so heavily in it with new games and platforms while developers and publishers themselves are still more than willing to have their games put on the service.
Other comments made during the Tech Live conference were perhaps not quite as reassuring as this one for Xbox fans. Spencer also addressed the question of price increases for Xbox-related offerings and suggested that those might happen in the future given that he doesn’t feel the company can hold onto its current pricing models forever.
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