Despite Decline In Hardware & Sales, Xbox Game Pass Generated Roughly $1 Billion According To FY23 Q3 Report


Posted on April 26, 2023 by Nick Moreno

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Although video games traditionally rely on the consumers to fuel platform holders via hardware and first-party sales, Microsoft has taken a new approach to the business model. Already, the firm pioneered this with services already, but since Xbox Game Pass was introduced has fully illustrated the subscription model to be a valid form of income. In one instance, Xbox boss Phil Spencer did express the service to be profitable.

However, others say to differ. From Take-Two Interactive, CEO Strauss Zelnick did argue that the subscription makes little sense in the current climate of the industry. But, even Microsoft itself even admits that the service does some damage too. In one report from gamesindustry.biz, the Xbox firm was transparent on how Xbox Game Pass does ‘cannibalize’ featured day one releases on the service.

And while Microsoft is recording further decline in both hardware & general sales from its gaming division, the services is said to be on a rise. You can read the document in the image below:

Additionally, Microsoft CEO Satya Nadella in the attached earnings call shares that services for Xbox has generated roughly $1 billion in the past quarter. “We are rapidly executing on our ambition to be the first choice for people to play great games whenever, however, and wherever they want. We set third quarter records for monthly active users and monthly active devices.

“Across our content & service business, we are delivering on our commitment to offer gamers more ways to experience the games they love. Our revenue from subscription reached nearly $1 billion this quarter.” From Windows Central, it is told that the referenced ‘subscription’ is in fact Xbox Game Pass. “Great content remains the flywheel behind our growth. We have now surpassed more than 500 million lifetime unique users across our first party titles.”

What is your opinion on Microsoft’s approach with services?

Source: Microsoft, (1)

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