Microsoft typically refrains from providing detailed revenue figures about Xbox Game Pass, but courtesy of a document filed by Brazil's Administrative Council for Economic Defense (CADE) in relation to Microsoft's attempted acquisition of Activision Blizzard, we've been provided with a little extra insight.
As first spotted by TweakTown, the document suggests that Microsoft made $2.9 billion in revenue from Xbox Game Pass in the fiscal period ending January 2021 - and this doesn't even take PC Game Pass into account.
Unfortunately, the report is a bit too vague to give us exact details on everything, such as whether the $2.9 billion figure includes any DLC sales through Game Pass, for example, or perhaps discounted Game Pass game sales. But even so, this at least gives us a rough idea of how much revenue the service is bringing in on a yearly basis.
And considering this report is about the last fiscal year, and Xbox Game Pass has since grown to over 25 million subscribers, you'd have to imagine that the figure of $2.9 billion is now even larger. Sounds pretty impressive to us!
What do you make of this? Let us know your thoughts down in the comments below.
[source tweaktown.com, via t.co]
Comments 45
Gold will soon come to an end.
Also I wonder why they didn't include the profit from gamepass? Although maybe its a bit complicated to calculate with the amount of games on there plus sales percentage from each game that gets sold via gamepass and the amount to each developer for just putting their games on there, then taking into consideration the cost to develop their own first party games. So yeah, sounds a nightmare to work out the profit.
And I'd wager this includes the dlc and game sales via gamepass discounts, as to me 2.9 billion seems a bit high considering the amount of free trials and £1 subscriptions deals.
Note: The 2.9 Billion does not factor in gamepass PC
Whether true or not, Microsoft is not a charity. They wouldn't be investing in Game Pass if it wasn't worthwhile and profitable (in the short or long run). Critics will question this in any way they can, no doubt. I'm convinced I made a good decision by subbing to GPU.
I'm not sure if this is as impressive as people make it out to be. It's 11 million people buying GP ultimate for a year on a regular price.. given that it's a no-brainer on a Series console, I would expect whole platform user base to be in there.
Again, it's revenue (pure sales), not profit. Also, profit is still less important to MS, and taking a $ loss is still ok, while increasing market share aggressively.
GP PC is surely getting bigger over time. I'd heard the implementation was flawed at the beginning, but during my trial period, it seemed to work extremely well. I'll definitely sign up again at some point when I'm not constantly distracted by new releases on other platforms.
A few important mentions have to be this only includes "the fiscal year from Jan 2021" and can't be concluded to be the "each year" revenue that the title suggests.
Also important to note is the fact that this is revenue generated and not net profit. So it would be quite interesting to know what that net profit is and then the amount spent on bringing games to GP.
Damn, that’s just on the console side too. Absolutely no idea what profit they’re making from this but Xbox’s gaming division is flying financially with record profits year on year. Not bad for a company with no games 😜
But but but Gamepass is not sustainable
Of course Game Pass is making this. They now have well over 30 million subscribers and it's rapidly growing. This is why it will absolutely be sustainable going forward. And this is also why Microsoft will be the industry leader when it comes to gaming, not Sony.
Dont care. All ik is i havent out a dollar into microsoft as everything can be done with reward points
@UltimateOtaku91 It can't include sales of DLC or games using the Game Pass discount as that would be fraudulent.
Subscription = subscription, they'd have to mark promotional pricing / cross-selling KPIs separately.
I guess my £1 a month is more than enough profit for them to keep paying all the developers.
If they could let me know the name of their account that fudges the numbers that would be great.
As at £12 a year, I don’t believe I’d be contributing enough to make an Indy game never mind anything else.
Hey ho, their loss I guess! Bring on repeated £12 GamePass years. Haha.
Those asking about profit, or the costs of running the studios, need to remember Xbox still sell their games too (often topping the Steam sales charts) - and there's no way they're giving out $3bn a year in Game Pass deals to get games and even if they were it's in growing mode at the moment.
Given the additional revenue streams and how important Microsoft considers "engagement numbers" over the financials anyway, I'd say it's in rude health and going to be fine...
@TheElectroFunky Well I've had Xbox All Access on my XSX for the last 2 years, so that's close to full price for Ultimate for 2 years (worth it for the interest free payments).
So I've probably been paying your share - you're welcome
@TheElectroFunky how are you getting the £1 deal every month?
Couldn't be happier with game pass and the future of xbox. I'll be a GPU lifer, for sure!
I think people crowing about profit and sustainability need to read again - its net income, not profit.
That's about 24 million people paying $120 for the year, which has to be what we'd expect?
Admittedly, profit doesn't matter to much to any of us, and neither to MS who are buying market share, so its nice to see the numbers reflecting the kind of rise we should expect.
They will not tell us about costs though or reveal any profit or loss, so longer term sustainability is certainly not proven.
However, the numbers are good and going in the right direction.
GamePass is amazing
@SplooshDmg I'm a tad salty that the screenshot functionality on the Xbox controller seems to be exclusive to Windows 11 so far. I'm not ready to upgrade my OS yet, but hitting a two key combination any time I want to take a screenshot is a bit of a pain.
@Widey85 Haha! Yeah, it’s crazy to me that I just keep doing it and getting all these games. I mean I don’t know how it’s profitable. As I don’t know anyone that pays full price in my family and friends circle, but love that it is.
Obviously I want all the companies to succeed, otherwise gamers won’t!
Also thank you for your payments! 😂
@UltimateOtaku91 Oh I just go to Kinguin, Gamvio and the like, search for 1 Month GamePass Ultimate (non stackable).
Then purchase for anywhere between £0.50-£1 ish, then as long as I let my GamePass expire by a few minutes each month, just redeem the code!
So yeah, do it for my daughters, partners, mine, then friends and family do it too.
I mean even people on eBay sell them codes they’ve just purchased from Kinguin etc for a few quid each. So yeah, easy enough!
Don’t won’t to post any links here, but if you need any further help give me a shout.
@Royalblues Sony had there Gamepass before Gamepass with PSNow which they never advertised or pushed until they were merging it with PS Plus because Gamepass was doing so well.
@Bmartin001 @Royalblues While Game Pass probably is sustainable long term if they get some traction, this tells us absolutely NOTHING about whether it is right now. $2.9 billion in revenue sounds like a lot but without knowing their outgoings we have no idea if this is profitable or not yet. If they spent $3 billion or $5 billion on Game Pass in that same year it would be making a loss.
As for scale consider this. If the ABK acquisition goes through, they inherit around 15,000 staff. Which at a industry approximate burn rate of $10,000 per employee per month (it's a slightly outdated figure from 2012) that means an additional $1.8+ billion per year just on that side alone. Suddenly that $2.9 billion revenue doesn't so grand.
TLDR: This means very little. But it's clear Microsoft are in this for the long haul, it likely it isn't profitable yet. In the meantime while we wait to find out i'll just keep enjoying Game Pass.
@Royalblues Totally agreed with you. Even with all its faults, GP is really a great service and I can't be happier about it (well, maybe when the big hitters will come next year, but still...).
But but but…. It’s unsustainable!!! Jimmy told me so!!!!
@TheElectroFunky we talked about this, I’m sure it was you anyways.
you might be paying a pound for your codes from those sketchy sites, but Microsoft got their money. The one losing in such transactions are either the people that had their cards stolen or sellers that got defrauded (or the credit card insurance.)
"Why make billions when you can make millions?!?"
@Notoriousmakavel It's a matter of Microsoft being willing to take all and any money they can. Regardless of optics.
This does include pc game pass & it's an estimate
@Would_you_kindly source?
@Dr_Luigi Knowing the popular eventual profit/hyper growth model of tech companies and the talk Phil Spencer has had regarding the wider gaming audience of mobile phones, my guess is that GamePass isn't profitable and won't be for several more years
It's a success since the very start but it's getting more popular every year. Of course, it's profitable and it can only get more subscribers with the new acquisitions and the new games that Xbox Game Studios are making.
People saying that it's free or it's £€$1, that's not correct. You still have to purchase Gold and Gold is not £€$1. The free trials aren't free either (unless you get a promotional code when you buy a new console), you pay 1 pound for 3 months but it's for new customers only.
Game Pass is the best deal in gaming and it looks incredible compared to Nintendo and Sony's subscriptions. On top of that, you can get free credit with Microsoft Rewards for Game Pass or for purchasing games. You can't go wrong with Xbox this generation because it's, technically and economically, the best choice.
@Tharsman I’d strongly suggest you travel to some of these countries and purchase games, like how I used to get cheaper N64 games from France.
It really is the case that when buying on the pound I can buy on a foreign currency far cheaper.
All I’m doing is evading various tax and currency loopholes.
You can tell yourself I’m not all you want, but just remember Microsoft themselves, just like Amazon, Apple, Sony etc - all hire people do the same on a corporate level.
I mean if we really didn’t want to fund unscrupulousness then we wouldn’t buy electronics made with in part forced labour - yet here we are.
Everyone has a high horse they like to ride in some part, I would just rather save money and buy through companies still registered through Companies House, yet give what I save to people in need. Friends, family, bloke down the street who needs a meal.
I mean I remember a time where I’d save hundreds of pounds by paying for £80 return flight to Spain, only to come back with a load of video games and so forth.
I do the same with Blu-ray 4K discs that are region free too.
I’ll support corporations more when they support their entire supply chain and areas of business more. Through investing in the people, communities and so forth.
Not everything cheaper is stolen.
Shame I can’t say the same about a PS5 that I bought last year from the Game store that came up stolen, yet cost a scalpers price and even came with a “warranty”.
@TheElectroFunky again like last time I repeat: I’m not judging at all. I’m just saying that 1 pound GamePass is not something you get in any part of the world. This is not some loophole or currency exchange you are benefiting from. Microsoft is getting paid for those codes in full.
I’m not about game prices, only GamePass.
@Banjo- I've just had 3 months of gamepass for a quid & have had a month subscription for a quid 3 or 4 times before that so it's not just for new subscribers lol
@UltimateOtaku91 u can literally get it free every month if u do bing searches on your phone and computer each day. Eve easier if u do the rewards app promos. I have paid anything in years on xbox
@TheElectroFunky your using the new account share trick.... You think they don't know 🤣🤣🤣 they can just stop the option to share trial with already established accounts.... But they won't do it now MS is ready to lose money this gen to establish a huge fanbase then all those tricks will be easily removed
@Gamingforlife Right, that's what the people that say that they're getting the new subscriber's promotion repeatedly are doing, like @Would_you_kindly.
@UltimateOtaku91 Regarding why it didn't include profit that's often something that companies will try to keep close to their chest when it gets too specific. If they didn't have to then they probably wouldn't provide that in a disclosure, or if the figure wouldn't support their goals. I'm sure that Microsoft have a pretty good idea of its profit/loss.
@Gamingforlife New account share trick? Eh? Yeah, I don’t even know what that means.
And of course Microsoft knows what codes I’m entering you bloody buffoon. What a stupid statement.
@Kaloudz there are 750 employees of 343i
@Banjo- I haven't used any tricks to get them I just click it when it comes up on my home screen saying a month of game pass for £1 or 3 months for £1 & it lets me get the deal lol then I just turn off recurring billing
@themightyant @UltimateOtaku91 "Profit" is hard to calculate on this because "costs" are almost impossible to quanitfy. Do acquisitions intended at boosting GP count as "costs" or M&A? Do studio costs count, or since they'd be selling games anyway is that separate. Do costs on buying games into the service count as negative compared to engagement? Does the cloud hardware platform rollout count as costs, or service expansion? And how much is a unique cost to running Xcloud and how much is shared infrastructure with all of Azure?
This kinds of revenues v profits discussions are kind of meaningless when talking about enterprises of this scale, really. We're using mom & pop business terms to apply to a company that just tosses a government contract on the pile as a register sale. Everything they do is interconnected and seldom applied as a single line item against a single business line. + revenues is just + revenues at this scale, we can't really quantify costs, and I honestly doubt they can quantify costs.
The "costs" are going to be absurd and many times that revenue line, but those costs aren't necessarily tied to running that revenue line, either.
TL;DR; We still know nothing
@Would_you_kindly So you subscribe and unsubscribe? Not a trick or anything but they're trying to have you back. To turn off recurring billing is not enough, if you don't let the subscription expire, you don't get that deal.
@NEStalgia Some people love to say that Game Pass is not profitable even if they don't have a clue.
@Banjo- yeah I only subscribe if there's a deal on for a quid because there's not much on gamepass I'm bothered about that I don't already own
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