Gamepass is profitable

[Mnementh]

Tober said:

Otter said:

All of this makes sense but people are not thinking very hard about the topic.

Based off old and approximate figures MS spends about 1billion on third party GP content. They make around a minimum of 3billion annually from subs. That would have to be 2billion they're spending a year on 1st party releases for it to eat all their GP revenue. That is like 4 COD size AAA games+ marketing campaigns with no alternative income (retail/Steam/xbox sales/playstation etc).

Outside of COD which makes all it's money back easily at retail and digital stores, the biggest budget games MS has had on gamepass has been the likes Doom, Indiana Jones and Awowed etc. And there's typically around 4 of these 1st party titles per year. Even assuming they don't have any alternative sales revenue, these games collective budgets are likely reaching 1billion, not 2...

It's safe to assume GP makes perfect financial sense for MS, but it's where it comes to the aquisitions they made with Activision and such that MS really has to depend on playstation and other platforms to get their return back.

Where does the 3billion annually come from? Did MS comment on how much revenue Gamepass makes? I must have missed it.

If it's based on math, it's a monthly service, I don't think we could conclude that everyone is doing a yearly subscription. Take a month if there is a game you like, cancel the next one. Also the service cost money to run eventhough prop not 1 billion or something on overhead, but it's not zero. 

Also it's never a good idea to use US$ pricing as standard to look at the world. Regional pricing exists and can be very different. A quick Google search gave me this as example:

"In Japan, Xbox Game Pass Core costs ¥842.00 (approximately $5.76 USD) monthly, or ¥2,138.00 (approximately $14.63 USD) quarterly. Xbox Game Pass Ultimate is ¥1,450.00 (approximately $9.94 USD) monthly"

And these Japan prices for example include VAT, so not all revenue.

It's simple math based on the subscriber number.

But you are off here with the monthly subs. The number given is 34M subscribers, not 34M active in a year. If in January someone subscribe and cancels in February, someone else subscribes then is needed to keep the number at 34M. So it doesn't matter that people only subscribe monthly, because that is fluctuation that leads to the same number overall. And anyways, how much people do you think go the effort with monthly resubscribing? Some people claim that, but even with other services like Netflix it isn't actually that impactful. People are lazy, if they subscribe they stay until it has not enough value.

Last edited by Mnementh - on 08 July 2025