Phil and MS saying growth has already slowed on console and that GP will never be more than 10 - 15% of their revenue is very telling
Keep in mind this was with Halo Infinite which had a lot of hype, FH5 and Psychonauts 2. I don't think we'll see this sudden mass adoption
Phil is trying to get a deal closed. One of the big concerns from CMA if you read it all was that they believe Game Pass will just turn into this massive juggernaut
on console (why phil mentioned it stalling on console - CMA is most concerned about the impact game pass + ABK has on the console space specifically in regards to Game Pass) once amplified with Activision Blizzard's games and will overwhelm the entire industry, particularly PlayStation, and scare off any other potential multi-game subscription competitors, turning Microsoft into a beast that can foreclose all new entrants and existing competition.
Phil by stating he doesn't ever see Game Pass being more than 10-15% of content and services revenue is throwing cold water on that fear. Pay close attention to what HoegLaw says. Phil can be very cagey here, and isn't required to be accurate. GAAP in accounting isn't a rule, but just principles. Each can follow their own practice and guidelines. We don't know how Microsoft or Phil is arriving at saying game pass is profitable or how it accounts for 15% of content and services.
Also, Phil is being clever. By phrasing it that way it makes Game Pass seem much less significant than it truly is (but some on we know Microsoft is spending money for a good reason on these acquisitions),
but what if he's speaking purely just on a monthly basis, and not quarterly, per Fiscal Year or Per Calendar Year?
Let's just use 25 million subs right now, and assume they're all paying $9.99. For one month that equates to
$249 million out of significantly more money that comes from everything else in Xbox content & services. That $249 million sure seems like nothing before you multiply it by 12 for the rest of the year to get yourself $2.9 billion. We already know Game Pass on console made $2.9 billion JUST on console calendar year 2021 based on a slip up by CADE revealing numbers Microsoft didn't want out. They've since kept the table but removed the exact number.
We know Game Pass is already past 25 million subs. We know many subscribers pay for Ultimate.
You don't think we'll see a sudden mass adoption when the games lineup in 2023 far surpasses the one in 2021? I see you're underestimating the power of a new Bethesda single-player RPG. Don't. Their games have the staying power that they do for very good reason. Psychonauts 2 was an excellent game, but it didn't have some massive hype around it. As big as Halo Infinite is/was, Starfield was always going to be a far bigger release on a whole different level, especially on the PC side of things with Steam. Halo ain't as big in the rest of the world and Europe as Bethesda's single-player RPGs are, and that will be reflected in sales of not just the game, but adoption of Game Pass.
Forza Horizon 5, yes, massive hype and success, but will surely pale in comparison to what Starfield achieves.
To think Game Pass will remain in a state where it's "stalled" on console, when it has undergone tremendous growth with every new batch of big first-party releases on Xbox since its inception, I don't think is an assumption that will hold up.
But the fun part is finding out! Let's find out.