Xbox Game Pass accounts for 15 percent of Microsoft’s gaming revenue, says Phil Spencer
“I don’t think it gets bigger than that," the executive admitted.
Microsoft’s Game Pass service is profitable and accounts for about 15 percent of the company’s overall Xbox content and services revenue. Microsoft Gaming chief Phil Spencer shared the tidbit of information in an on-stage interview at The Wall Street Journal’s Tech Live conference (via The Verge).
“Game Pass as an overall part of our content and services revenue is probably 15 percent,” he told The Journal’s Sarah Needleman. “I don’t think it gets bigger than that. I think the overall revenue grows so 15 percent of a bigger number, but we don’t have this future where I think 50 to 70 percent of our revenue comes from subscriptions.”
Spencer added that Microsoft has recently seen “incredible” growth on PC, with uptake slowing on consoles primarily due to saturation. “... at some point you’ve reached everybody on console that wants to subscribe,” he said. Microsoft announced earlier this week that PC Game Pass subscriptions increased by 159 percent year over year during Q1 2023. The company has also seen people stream more games over its Xbox Cloud Gaming platform. Spencer hinted that mobile would play a major role in the future of Game Pass.
“If you take a long-term bet, which we’re doing, that we will be able to get access to players on the largest platforms that people play on — Android and iOS phones — we want to be in a position with content, players, and storefront capability to take advantage of it,” he said, alluding to the recent disclosure that Microsoft wants to build an Xbox store that’s available on mobile devices.
Spencer was also adamant that the price of Game Pass would go up at some point. “We’ve held price on our console, we’ve held price on games and our subscription,” he said. “I don’t think we’ll be able to do that forever.”
It’s not often companies like Microsoft share figures like the ones Spencer did earlier today. They provide an insight into how important services like Game Pass are to the company’s bottom line and where they see the product evolving in the future.
