Xbox Game Pass is profitable for Microsoft

Xbox Game Pass is profitable for Microsoft, although some doubts persist about its calculation.

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The debate about the profitability of Xbox Game Pass is back in the spotlight after the latest statements collected by Christopher Dring, a journalist from GamesIndustry.biz. Despite the doubts that usually circulate about the impact of this subscription model, Microsoft has systematically confirmed that the service is profitable for the company and continues to grow year after year.

The profitability of Game Pass is based on several key factors: on the one hand, the recurring revenue generated by millions of subscribers worldwide; on the other hand, efficient management of associated costs, such as commissions to third parties, marketing, and platform maintenance. According to the information shared by Dring, Microsoft makes a profit with Xbox Game Pass without needing to count the development costs of its own games in the calculation.

Xbox Game Pass: A Profitable Service, But With Nuances

Microsoft itself considers the service as one of its major future bets, ensuring that the revenue it generates far exceeds the expenses related to third-party agreements and maintenance. “The costs associated with the Game Pass business are the commissions paid to third parties, marketing, and service costs… And based on that, it’s profitable,” explained Christopher Dring, who has directly collected the company’s stance.

The growth of the platform, the constant increase in users, and the regular arrival of new titles, both proprietary and from third parties, reinforce Xbox Game Pass’s position as a successful model within the industry. Microsoft continues to bet on improving the offer and ensuring that the subscription is an attractive option for players, while the service’s profitability confirms that the strategy is the right one.

Xbox Game Pass: Profitable for Microsoft, But Is There Fine Print?

Christopher Dring himself, after conversing with company sources, clarifies that this profitability calculation does not include the development costs of the proprietary games that Xbox launches in the Game Pass catalog.

Thus, although the subscription generates profits covering payments to third parties, marketing, and infrastructure, the money invested in large productions like Starfield or Avowed is not accounted for. “What they don’t count is the loss of billing that Xbox’s proprietary studios might be suffering from having their games on Game Pass from day one,” Dring nuances.