Xbox Game Pass is profitable, Phil Spencer says, comprising rough around “10 to 15 percent” of Microsoft’s gaming revenue. However, growth is slowing, and price increases may be on the way.
In a Wall Street Journal Live segment reported on by journalist Tom Warren, Spencer shed more light on the subscription service and said that it is currently profitable. However, Game Pass may be reaching a saturation point with users.
“We’re seeing incredibly growth on PC… on console I’ve seen growth slow down, mainly because at some point you’ve reached everybody on console that wants to subscribe,” Spencer said.
Phil Spencer confirms at WSJ Live that Xbox Game Pass is profitable for Microsoft. It’s around 15% of gaming revenues for Microsoft
“I think it will stay in that 10-15% of our overall revenue, and it’s profitable for us.”
— Tom Warren (@tomwarren) October 26, 2022
Spencer also hinted at possible price increases, whether on Xbox Game Pass or on the consoles themselves. While Sony recently raised prices on the PS5 in many territories, Xbox has held back from following suit.
“I do think at some point we’ll have to raise the prices on certain things, but going into this holiday we thought it was important to maintain the prices,” Spencer said. “We’ve held price on our console, we’ve held price on games… and our subscription. I don’t think we’ll be able to do that forever. I do think at some point we’ll have to raise some prices on certain things…”
Spencer’s quotes were part of a wide-ranging discussion, with topics including the future of Call of Duty and the Metaverse. It follows Microsoft’s recent earnings report, which saw Xbox report healthy sales despite supply chain issues. Xbox has mostly declined to reveal subscription numbers or revenue from the service, but some outlets have reported that it could be as much as $3 billion.
All of this is against the backdrop of Xbox’s ongoing attempt to push its Activision Blizzard deal through various regulatory bodies around the world, most notably the United Kingdom’s Competition and Markets Authority [CMA]. If it goes through, it’s expected to go through sometime in 2023.
Kat Bailey is a Senior News Editor at IGN as well as co-host of Nintendo Voice Chat. Have a tip? Send her a DM at @the_katbot.
Source: IGN Video Games All