Xbox Game Pass Generated $2.9 Billion in Revenue in 2021 - News
by William D'Angelo , posted on 09 October 2022 / 6,570 Views
Brazil's Administrative Council for Economic Defense (CADE) last week voted to approve Microsoft's Activision Blizzard acquisition with no restrictions.
The report from Brazil's CADE has revealed Xbox Game Pass generated $2.9 billion in revenue in 2021. All of Xbox generated $16.28 billion in the 2021 calendar year. This would mean Xbox Game Pass accounted for 17.8 percent of all Xbox revenue generated last year.
It was announced in January of this year Xbox Game pass had surpassed 25 million subscribers.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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Very hard to imagine they couldn’t profit off of 2.9 billion, which doesn’t even include PC subscribers. It clearly generates more revenue than most of us thought.
Yeah, comes out to $240m a month in 2021. They add anywhere from 12-20 games per month, and I doubt very many of those monthly games cost them more than a couple million since alot of what they add are indie and AA games (I doubt they pay more than a few hundred thousand $ for some of the indies they add). We heard they paid between $5-10m to get Guardians of the Galaxy onto Gamepass, and it was a AAA game that was only 3 or 4 months old, an even older AAA game would likely cost less than that to add to Gamepass. The day one Gamepass deals probably cost a good bit, especially the day one AAA's, but there have only been like 3 day one AAA deals so far, it's far from an every month thing. So while they may lose money on the rare months with a day one AAA 3rd party game, the rest of the months should be netting a tidy profit, resulting in an overall net profit.
Also worth noting that the $2.9b apparently is for console gamepass only, they make additional money from PC gamepass, plus this also doesn't seem to include any revenue generated by people using their Gamepass discount to buy Gamepass games or DLC for Gamepass games, Xbox of course gets the standard 30% cut of the revenue on those sales.
I think we can say without doubt now that Gamepass is a profitable model, and will only become more profitable in the future as subs continue to grow on the back of the Bethesda and Activision-Blizzard acquisitions and continued day one gamepass deals on 3rd party games.
Don't forget that GP is also filled with Xbox's own games which they don't have to pay to put on the service.
But MS has to pay to develop the game too, no? 2.9 billion might seem alot, but makes you wonder how much of that is pure profit after paying for the games to be on the service.
You still forget that people can still pay to own the games outside of GP which will also help make up the development costs of their games. That $2.9b will be covering alot of costs. And it will only continue to grow. $10 a month over a year is more than $70 on 1 game.
Exactly. It seems like Forza Horizon 5 did well in sales of the game, despite being on Game Pass. It charted well on Steam, for example.
Animal Crossing alone generated close to 2 billion dollars in 2020. Most Call of Duty games gross over 2 billion dollars a piece. Your going to need to almost double that install base to break even adding Call of Duty to gamepass.
Yeah but Game Pass is indefinite revenue compared to single titles. And it’s only growing. This revenue amount doesn’t include PC subs either since that’s a separate sub service.
That suggests that everyone will choose to play CoD on Gamepass instead of buying it. We already know quite alot of people take advantage of the Gamepass discount to to buy games. Plus not everyone on Xbox and PC will get Gamepass, some still choose to play games the old fashioned way.
Not to mention the fact that CoD won't be day one Gamepass until after the current Sony 3 game CoD marketing deal ends in most likely 2024, so the first CoD on Gamepass day one could be in 2025, by then Gamepass could be at 40m+ subs easily thanks to Starfield, other 2023 and 2024 Xbox exclusives (Avowed, Fable, Hellblade 2, Contraband, Perfect Dark, etc.), and continued day one Gamepass deals on 3rd party games.
I am one of the 25 million that solely relies on gamepass. If I like the game then I buy the physical copy for my collection. I have converted 10 people to ganepass and they don't game ?
Who said everyone is going to stop buying CoD?
It's still growing. Xbox series is doing great and gamepass is expanding. I'm sure this will be a game changer in the long term, they just had to take hits in the beginning of it's creation to put everything in place.
Microsoft is a profit powerhouse, Im sure they know what they are doing. i see there are a few people who can manage better lol
Discussed this with Ryuu before, and we came to a different conclusion than this article. Because it doesn't specify that it is only refering to Gamepass. That idea supposedly came from an assumption someone on Era made "because it's compared to services like EA Play". But that's EA's only subscription servive in this category. And that would mean the 40-50% figure from Sony is only based on something like Playstation Now, and Nintendo generated 932m solely on their Nintendo 64/Genesis subscripton service? I very much doubt that's the case. Sony's 'Gamepass-esque" subscription services are nowhere near as popular as Gamepass. So they should not have made more revenue. And this is from 2021, before the new Extra/Premium PS Plus tiers were introduced. Which include PS Plus anyway. So this is very likely including things like XBL and PS+.
Whos suprised? It will only continue to grow.
Do we know that this doesn't also include Xbox Live Gold? Because it seems like the Sony and Nintendo "numbers" must be from PS Plus and NSO which would be their equivelant to that (Though I guess PS Now would also have contributed a little).
It is indeed odd to count NSO, but nog Xbox live
We need a lot more context. Is that just gamepass subscriptions, and are we certain that it excludes PC subs? If I buy DLC for a game that I play on gamepass, where is that revenue shown? Same with cosmetics. Where do they recognize that revenue?
We aren't sure whether or not pc is counted. Microsoft markets gamepass as Xbox Gamepass for Console and Xbox gamepass for pc.
Also 2.9 billion sounds like a lot, but how much revenue was lost by people not buying the game instead. We also don't know the marketing cost, operational costs, cost of acquiring games yet. Which will only rise as gamepads gets bigger. As more in gamepass means less sold via other routes.
Considering that revenue for the whole gaming division as been consistently up for the last 3 years all the while Gamepass subscription gained traction. Unless I'm missing something we can safely assume that whatever revenue loss is made by the loss of individual sale, it is outshined by revenue from Gamepass subscription.
This of course doesn't speak much when it comes to profit which should factor in every cost you mentioned. But the only indication I could gather in a small amount of research is that there doesn't appear to be much turmoil from the shareholders which mean profit margins should be very comparable, maybe even better or a strong proimise of being better in the short/medium term.
No way to say how profitable this is, but at the very least the entire, "GP isn't sustainable" rhetoric is false.
What's depressing is how a stupid single microtransaction-heavy mobile game generates that same amount.
As usual for MS-smoke and mirrors. Why can’t they just tell us how much they are actually making from Gamepass after all the expenses are factored in???
Very reasonable if we go by 25 million subs by Jan 22'.
Average of $116 per year per sub. Baring in mind of course that it was going through a growth period over the course of the year. So subs from Jan 21' are not the same as subs Dec 21'.
Revenue means very little though, you'd wonder what the profit margin is and how much they're spending investing in the service.
from year and half ago the numbers probably alot higher now. has been alot of day 1 games since then. also is alot of japanese unrelesed games dropping onto it they must be giving them the port funding for it hit gamepass
Through the Epic lawsuit vs Apple and the regulatory oversight of the Activision deal, we got a behind the look at some number, figures, and industry secrets that would not have been released otherwise.
It's really not that much revenue.
For Eg. If you divide 2.9 billion by 100 Game Pass games for the year ( yes I know that's not the correct amount of game pass games, but I'm using that number just to make it easier to understand ).....and that amounts to an average of 29 million per game on game pass.
29 million revenue average, and that including many Indies which its likely good for them ?
Im just not sure it's that much revenue for Xbox when they would have spent a lot to get those games onto the service.
Anyway, into the future when 1st party games and other big games appear day 1 into the future, that revenue will be a heaps more, and I'll keep paying my subscription to Game Pass.
No chance is a platform like GP profiting off $2.9billion with only 25 million subscribers.
$116 per subscriber
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now subtract EA play. Normally $4.99/month but lets say $2 ($24)
-physical cost of hosting
-admin
-advertising
-Phil Spencer
Those will probably drag it down to what....$70, ok lets be generous to Microsoft and put all of those at $6 lol - $90 left
Then move onto games......I can't see them turning a profit releasing every MSFT game as well as 3rd party games on Day 1 considering a single game is nearly the cost of the budget.
I guess its all complicated by MSFT buying activisionB - possibly putting the £69billion or whatever it is in one cost centre, giving the games and library at no cost to another cost centre, that cost centre looking like it makes loads whilst the other - hidden out of sight - takes losses which some accountant then uses to offset some tax.
They don't need to be making a profit right now. They are in it for the long haul. Even if they are breaking even or losing a few million, that bold well for them in the future where the sub numbers will increase considerably.
people who think like you will never amount to anything in the business world..
