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Azzanation on 25 July 2020
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Barkley said:

I'm still unconvinced on the business value of gamepass. Sony only has to sell me two 1st party games over a 28 months period and they've made more profit from me than MS has from me getting gamepass.

At the very least the insane firesale Microsoft did must have completely scuppered their profits. I paid £76 for 28 months of Gamepass Ultimate. And remember that not all of that £76 is going to microsoft, it's going to third parties too. Now they're going to add cloud gaming on top of that?

Maybe at full price gamepass is an earner, but their bottom-line must be really hurting for everyone that took the insane offer of upgrading from gold to gamepass ultimate for free.

What should have cost me £307 (at £10.99/month) cost me just £76. Gamepass is directly hurting their profits from individuals like me.

You are missing the point tho. Subscribers to GamePass don't own the titles, so MS isn't exactly losing a game, you are renting it, and they will be renting their games to a lot of people that aren't normally interested into the games either.

GamePass is free marketing for the games. With the full retail versions, people can pay for it than return it a week later getting a full refund on the game. With GamePass, MS has already made their money. It also promotes their store front which is more profitable than paying for it at retail level.

GamePass also grants discounts to the full digital games as well. So if you enjoy playing Grounded, and wish to purchase the full game, sometimes they take 10% to 20% off the price if you are a member. 

MS's direction with GP is quite simple, instead of having 30% of your audience subscribing to Live, they are aiming to have most if not all members subscribe to GP. Now lets do the maths..

Example: $10 by 1 year is $120, times that by 20m Subscribers = 240m in just 1 year of service and that's only at 20m subs. 240m now times that by 3 years = 720m. That's how they make there money and that's not including digital purchases, there Live members and their retail sales. GamePass is a long term investment not a short term investment. It not only cuts out the middle men in Retail but it is a service that will continue to grow and with 14+ gaming studios placing all their games on the service, its not rocket science that it will be driven well.