Game Pass makes up 15% of Xbox revenue, with Microsoft set to focus on PC subs

  • During a recent interview Xbox Gaming head Phil Spencer shared some insight into the company’s Game Pass offering. 
  • He explained that it is now profitable, with it also nearly reaching saturation point among console owners. 
  • The focus for the company moving forward will be on the PC Game Pass aspect of the business.

This week the Wall Street Journal has been hosting its Tech Live event and while it is not necessarily something that would pique our interest, an interview with Xbox Gaming head Phil Spencer has.

Spencer spoke about the recent performance of the gaming division of Microsoft and in particular its Game Pass service, which we are big fans of here at the office. The reason for this is that it arguably offers the best value-for-money gaming experience in the market to date and is an offering that PlayStation is yet to fully match.

We’re not the only fans of the service either, with Spencer noting that Game Pass is now a profitable offering from Microsoft, accounting for roughly 15 percent of the revenue that Xbox currently garners.

The Xbox head was also careful to point out that Microsoft does not view Game Pass as becoming some behemoth in the industry too, highlighting that he does not see it going much further than the aforementioned 15 percent.

“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 to 70 percent of our revenue comes from subscriptions,” he told WSJ’s Sarah Needleman during the interview.

Where Spencer does see growth, however, is in the PC side of Game Pass. As Engadget points out, Microsoft highlighted a growth of 159 percent in PC Game Pass subscriptions for Q1 2023. This trend is expected to continue, especially as Game Pass on console is nearing a saturation point, as Spencer admits that most people who want to access the service via an Xbox are already doing so.

The other big focus, perhaps unsurprisingly is on the mobile side of things. Here Spencer did not mention a Game Pass for smartphones per se but did speak to the fact that a lot of opportunities lie in this segment, particularly in terms of delivering content.

“If you take a long-term bet, which we’re doing, that we will be able to get access to players on the largest platforms that people play on — Android and iOS phones — we want to be in a position with content, players, and storefront capability to take advantage of it,” he said.

With Microsoft also looking to create a mobile game store if its deal to acquire Activision Blizzard gets the green light, that too will become a major focus for the company moving forward.

While all this is happening on the Xbox side of things, one has to wonder why Sony has not tried to replicate the Game Pass model fully with its PlayStation services.

[Image – Photo by Joshua Oluwagbemiga on Unsplash]


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