Microsoft Reported To Be Spending $1 Billion For Xbox Game Pass Deals Annually

One of the biggest questions surrounding Xbox is not the state of the platform’s future in hardware, but how Xbox Game Pass functions financially. With the continuous offers from Microsoft for the subscription, the question remains if it’s profitable or not. As per The Verge in 2022, it is indicated that the service is tipping into the green with a growing user base projected in the coming years.

In a more recent report from Ampere Analysis, it is predicted that Microsoft could very likely generate up to $5.5 billion from its service alone by next year. However, that depends on the turnout from its subscriptions and the spending it makes to drive profit. At the start of the year, TrueAchievements calculated the value in Xbox Game Pass offerings was roughly $8,700 from 2023.

But, that does not determine how much Microsoft actually spent to feature on Xbox Game Pass. From Bloomberg, it is reported that Microsoft opens its wallet to at least $1 billion towards third-party titles coming to Xbox Game Pass. “Game Pass was also a major adjustment for publishers. To sweeten the deal, Microsoft now spends $1 billion a year getting third-party games on the subscription service.”

The report continues: “The largesse has been more than enough to win over small publishers, to whom it offers flat fees of millions of dollars upfront to include their titles, along with a portion of subscription revenue and the promise of exposure they couldn’t count on getting otherwise.” What is more surprising is how third-party studios find opportunities, but fewer independent developers can do the same.

One report from VG24/7 revealed that the ongoing ‘gold rush’ of deals from both Xbox Game Pass/Epic Games Store are drying up the past year. While originally a new standard for platforming overlooked games has now be disregarded as an option altogether. You can read the full report by heading here.

Are you shocked how much Microsoft invests into Xbox Game Pass?

Source: Bloomberg