What you need to know
- Xbox Game Pass is Microsoft's all-you-can-eat gaming subscription service, providing access to hundreds of games for a relatively low monthly fee.
- Microsoft is attempting to acquire Activision-Blizzard in a blockbuster acquisition valued at over $70 billion dollars.
- Regulatory scrutiny of the deal has led to certain data points being made public, giving us a glimpse into the revenues associated with Xbox Game Pass.
- As of January 2021, Xbox Game Pass was racking up $2.9 billion dollars in revenue for the fiscal period.
Sometimes, Xbox Game Pass seems a little too good to be true. Flying in the face of traditional gaming revenue models, with Xbox Game Pass, Microsoft is offering thousands upon thousands of dollars' worth of content for $10 dollars a month. It's potentially even cheaper if you factor in the upcoming Xbox Game Pass Friends & Family accounts as well.
In any case, Xbox Game Pass isn't going anywhere. I've seen analysts and pundits rally around the idea that the service must be burning through cash hand over fist in order to offer the value it does, and that may still be true. But as noticed by Tweaktown, we now have a glimpse at roughly how much revenue Xbox Game Pass is actually generating.
Microsoft is currently trying to get its massive Xbox Activision Blizzard merger through regulatory bodies around the globe. In order to make its legal arguments, certain data points Microsoft typically doesn't share with its shareholders publicly is making its way into the public domain, as a result of these discussions. It turns out that Xbox Game Pass is making a fair bit of dosh.
According to Brazil's regulatory body CADE, Xbox Game Pass' revenue from subscriptions stands at $2.9 billion dollars in the fiscal period ending January 2021. Tweaktown noted that it accounts for 18% of Microsoft's revenue from gaming for that fiscal year, which would have put Xbox Game Pass subscribers at around the 18-19 million mark. The last official figure we got on Xbox Game Pass subscribers came last January, where Redmond revealed it had hit 25 million users.
It should be noted, however, that this figure only includes users on the console versions of Xbox Game Pass, with PC Game Pass figures omitted. It's also hard to know the exact breakdown of this revenue figure. Does it include purchases of games in the post-Game Pass discount period? Does it include microtransactional sales and in-game content sales for titles that are in Xbox Game Pass? Or is it representative purely of the subscriber figures across Xbox Game Pass and Xbox Game Pass Ultimate, which are $10 and $15 apiece?
And sure, revenue also doesn't show us exactly how much Microsoft is spending to produce that turnover. What it does show us unequivocally is that there is serious and continued demand for this type of subscription service. Whether it's Xbox Game Pass for consoles, Xbox cloud gaming, or PC gaming, the service is likely here for the long haul.
