Gamepass is profitable

[Tober]

Otter said:

Tober said:

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.

These are loose approximations from sub data which even when lowballed, give a sound foundation for some profit margins. Assigning the cost of 1st party games exclusively to gamepass as if they make no other revenue doesn't make sense but I did it anyway to reinforce how unlikely it is that gamepass makes a loss. We will never get straight numbers from Xbox so we have to use our powers of deduction. Chris Dring who is gave us the data that MS does not include 1st party loss in sales has clarified himself, that people who would know are suggesting to him that it is still profitable even when accounting for that.

I think we if we start to suggest otherwise we should have some sort of meaningful starting point for making that argument.

I am not suggesting Gamepass is not profitable, but I'd like to understand the accounting behind it more. Or in this case the logic deduction.

Xbox division has 20.000+ employees. Given the type of industry I could guess an easy average $100.000+ cost per FTE (not only salary, also other cost associated with employment). That alone would be $2B at the minimum. Not including any outsourcing or contracting work. Not including any additional cost like advertising or registration.

Obviously Gamepass is not the only means of revenue for Xbox, but still it would be interesting the breakdown how much will be associated to it. Clearly Gamepass alone would never be able to support Xbox.