news business Xbox Game Pass: profitability, growth, price hikes… Phil Spencer gets going
From time to time Microsoft announces the number of Xbox Game Pass subscribers, but we can’t say that we know much concrete about its statistics: luckily Phil Spencer comes to indulge in the subject of his famous service.
Phil Spencer, current head of Xbox, is known to emphasize Game Pass: his efforts are constant and probably very expensive, but they are definitely beginning to bear fruit. During the WSJ Tech Live event in California, the leader gave an approximately 30 minute interview. revealed a number of very interesting details about the iconic catalogue.
summary
- Xbox Game Pass is profitable, it’s official
- The increase ? She slows down
- The prices will soon be inflated? It is possible
Xbox Game Pass is profitable, it’s official
In case some are still wondering: Yes, Game Pass is profitable and it’s Phil Spencer saying so, without giving exact numbers. With more than 25 million subscribers to the latest news, probably more today, the service implemented “between 10 and 15%” of Microsoft’s video game industry revenue.
That should shake some competitors who don’t yet believe in the profitability of the program that it must have cost an astronomical sum to have solid support today. Unfortunately, we lack official data at this level.
The increase ? She slows down
Unless there is a catch: Growth on Xbox consoles is starting to slow down. Here’s how Phil Spencer confides in The Verge: “We don’t think the future will be 50% or 70% of subscription revenue.”. On the contrary, the American assumes that it will continue to stagnate between 10 and 15%, as it is today.
And make no mistake: between 10 and 15% of the revenue from the gambling industry, that’s not so bad for the simple and good reason that all revenue from this sector keeps growing. The more time goes by, the more money the Game Pass brings in.
On the PC Game Pass side, on the other hand, the service is experiencing a meteoric rise with 159% growth, just that. A progression curve that is now difficult to achieve on Xbox computers: “At some point you’ve reached everyone who wants to subscribe to consoles”says Spencer.
The prices will soon be inflated? It is possible
Currently priced at $9.99 per month for Xbox Game Pass, $9.99 per month for PC Game Pass and $12.99 per month for Xbox Game Pass Ultimate (which brings it all together by adding cloud gaming), Microsoft guarantees a correct price for a catalog of highly interesting games, dense and even with big AAAs as soon as they come out. Therefore, on a base of 25 million subscribers, we can estimate the monthly revenue to be somewhere between 250 million and 325 million dollars, hence the profitability mentioned above.
However… Phil Spencer does not rule out a price increase. Because prices are finally rising everywhere due to the ailing economy and the continued desire for companies, the manager did not mince his words in the interview:
Phil Spencer
I think at some point we will have to increase the price of certain things. But as the holidays approached, we felt it was important to keep prices down.
It remains to be seen what the prices of these “things” will be and when, but the talk is certainly genuine and the actions to be expected. And so maybe after the “holidays” (winter?). Take it for granted.
And you? Are you a Game Pass subscriber or planning to take the plunge soon?
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