Game Pass isn’t as profitable as it’s claimed, according to insider

There’s been a great deal of discussion surrounding Xbox Game Pass and its viability, with some developers expressing concerns with the subscription service’s long-term sustainability. That said, Microsoft has for quite some time claimed it to be a profitable service. While this may be true in some regard, it seems as though the console maker might have been stretching the meaning of the word somewhat.

In a post discussing the viability of Xbox Game Pass in the wake of the latest mass lay-offs at Xbox, known industry insider Christopher Dring took to Twitter to offer some clarity on the common claim that the service is profitable and has been for a while, writing:

“So costs associated with the Game Pass business is fees paid to third-parties, marketing, service costs… and by that measure, it’s profitable.”

Dring continued, “What they don’t count is the lost revenue that Xbox’s first-party studios are seeing as a result of the service. I have to imagine if first-party studios received similar compensation, that profitability might not be correct.”

Considering that Game Pass’ whole USP is the fact that all first-party games are added day-one to the service, not counting these costs feels somewhat disingenuous – and perhaps offers greater insight into how Microsoft is currently perceiving Xbox and Game Pass.

It will be interesting to see whether Microsoft will have anything to say on the matter in future.

Discuss on our Facebook page HERE.

KitGuru says: Did you believe the ‘Game Pass is profitable’ claims? Does this recent addendum make more sense? Should Microsoft stop offering first-party titles day-one? Let us know down below.

Become a Patron!