Microsoft Gaming CEO Phil Spencer shares a rare insight into Xbox Game Pass – Times of India
Microsoft is going all in for gaming and a recent revelation from the top executive of the gaming division suggests their efforts are paying off. Microsoft Gaming CEO Phil Spencer has revealed that the Xbox Game Pass subscription service is already profitable and constitutes around 15% of Microsoft’s overall Xbox content and services revenue.
“I don’t think it gets bigger than that. I think the overall revenue grows to 15 percent of a bigger number, but we don’t have this future where I think 50–70 percent of our revenue comes from subscriptions,” Spencer said while speaking at The Wall Street Journal’s Tech Live conference.
The development comes after Microsoft announced that it saw PC Game Pass subscriptions increase by 159% percent year-over-year and Xbox hardware revenue has grown by 13 percent. “We’re seeing incredible growth on PC … On console, I’ve seen growth slow down, mainly because at some point you’ve reached everybody on console that wants to subscribe,” Spencer added.
The overall gaming revenue grew “slightly” while Xbox content and services revenue dropped by 3 percent. Microsoft attributes this drop due to decline in first and third-party content but it looks forward to better business in the coming months. “As we look towards the holidays, we offer the best value in gaming, with Game Pass, and Xbox Series S. Nearly half of the Series S buyers are new to our ecosystem,” Microsoft CEO Satya Nadella said.
“I don’t think it gets bigger than that. I think the overall revenue grows to 15 percent of a bigger number, but we don’t have this future where I think 50–70 percent of our revenue comes from subscriptions,” Spencer said while speaking at The Wall Street Journal’s Tech Live conference.
The development comes after Microsoft announced that it saw PC Game Pass subscriptions increase by 159% percent year-over-year and Xbox hardware revenue has grown by 13 percent. “We’re seeing incredible growth on PC … On console, I’ve seen growth slow down, mainly because at some point you’ve reached everybody on console that wants to subscribe,” Spencer added.
The overall gaming revenue grew “slightly” while Xbox content and services revenue dropped by 3 percent. Microsoft attributes this drop due to decline in first and third-party content but it looks forward to better business in the coming months. “As we look towards the holidays, we offer the best value in gaming, with Game Pass, and Xbox Series S. Nearly half of the Series S buyers are new to our ecosystem,” Microsoft CEO Satya Nadella said.
During the earnings call, the chief executive also noted that more than 20 million people have streamed games on Xbox Cloud Gaming, which is up from 10 million earlier this year.
Recently, the company also revealed to the UK’s Competition and Markets Authority (CMA) its plans of expanding gaming beyond consoles by bringing “more games to mobile platforms, including through mobile apps and cloud-based game streaming technology.” The watchdog is reviewing Microsoft’s acquisition of Activision Blizzard. Microsoft wants to leverage the opportunity to scale a game store to compete with Google Play and the App Store.
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