[IGN] Xbox Game Pass Revenue Was 'Nearly $5 Billion for the First Time' Over the Last Year

Topher

Topher

Identifies as young
Xbox Game Pass revenue reached a new record for Xbox over the last year, achieving "nearly $5 billion" in revenue for the first time.

This comes from the company's Q4 and full-year earnings results, covering the last twelve months ending June 30, 2025. While CEO Satya Nadella announced the milestone on the call, he did not provide specific revenue numbers for Game Pass.

Nadella also did not share subscriber numbers. That said, Game Pass subscribers are confirmed to have reached 34 million back in February 2024, and a Microsoft employee's profile suggested just two months ago that this number had reached 35 million, though this is unverified.

Some of that growth likely comes from price hikes on the service that kicked off in July of last year. But it hasn't hurt that Xbox dropped a number of new first-party games on Game Pass especially in the last quarter of the fiscal year, including The Elder Scrolls: Oblivion: Remastered, Doom: The Dark Ages, and Indiana Jones and the Great Circle.

Overall, gaming revenue for Xbox was up 10% year-over-year and Xbox content and services revenue was up 13%, driven by growth in first-party content and yes, Xbox Game Pass. Hardware revenue was down year-over-year by 22%.

Despite these increases, Xbox recently laid off hundreds of workers across various parts of its gaming business and canceled multiple projects, including Everwild and Perfect Dark.

www.ign.com

Xbox Game Pass Revenue Was 'Nearly $5 Billion for the First Time' Over the Last Year - IGN

Xbox Game Pass revenue reached a new record for Xbox over the last year, achieving "nearly $5 billion" in revenue for the first time.
www.ign.com www.ign.com



Here is the direct quote and the transcript from the earnings call:

"And Game Pass annual revenue was nearly $5 billion for the first time."

 
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Bonfires Down said:
Game Pass Ultimate will be $30 at some point and you people will still act like it's not profitable.
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It... probably won't be. As a reminder, it took Spotify 10+ years and 100 million+ subscribers to break even. It took Netflix 15 years and 150 million+ subscribers to become profitable.

Game Pass is at a fraction of their user base, and the production costs associated with video games are substantially higher than those linked with movies, music, or TV. I am sorry to tell you that the math works against Game Pass at the best of times, and that's before accounting for any inflated expectations for it that may exist within the parent company after springing for a $70 billion acquisition.
 
LakeOf9 said:
It... probably won't be. As a reminder, it took Spotify 10+ years and 100 million+ subscribers to break even. It took Netflix 15 years and 150 million+ subscribers to become profitable.

Game Pass is at a fraction of their user base, and the production costs associated with video games are substantially higher than those linked with movies, music, or TV. I am sorry to tell you that the math works against Game Pass at the best of times, and that's before accounting for any inflated expectations for it that may exist within the parent company after springing for a $70 billion acquisition.
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If subscriber count is all that matters then the EA and Ubi subs should have collapsed long ago.
 
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Topher said:
Xbox Game Pass revenue reached a new record for Xbox over the last year, achieving "nearly $5 billion" in revenue for the first time.

This comes from the company's Q4 and full-year earnings results, covering the last twelve months ending June 30, 2025. While CEO Satya Nadella announced the milestone on the call, he did not provide specific revenue numbers for Game Pass.

Nadella also did not share subscriber numbers. That said, Game Pass subscribers are confirmed to have reached 34 million back in February 2024, and a Microsoft employee's profile suggested just two months ago that this number had reached 35 million, though this is unverified.

Some of that growth likely comes from price hikes on the service that kicked off in July of last year. But it hasn't hurt that Xbox dropped a number of new first-party games on Game Pass especially in the last quarter of the fiscal year, including The Elder Scrolls: Oblivion: Remastered, Doom: The Dark Ages, and Indiana Jones and the Great Circle.

Overall, gaming revenue for Xbox was up 10% year-over-year and Xbox content and services revenue was up 13%, driven by growth in first-party content and yes, Xbox Game Pass. Hardware revenue was down year-over-year by 22%.

Despite these increases, Xbox recently laid off hundreds of workers across various parts of its gaming business and canceled multiple projects, including Everwild and Perfect Dark.

www.ign.com

Xbox Game Pass Revenue Was 'Nearly $5 Billion for the First Time' Over the Last Year - IGN

Xbox Game Pass revenue reached a new record for Xbox over the last year, achieving "nearly $5 billion" in revenue for the first time.
www.ign.com www.ign.com
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Ok i'm confused after reading this. If he's not sharing revenue numbers nor subscriber numbers than isn't the 5 billion number meaningless?
 
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off the top of my head, these are all games I had huge interest in that I managed to play on gamepass in the past few months:

Indiana Jones and the Great Circle
Atomfall
Tony Hawk's Pro Skater 3 + 4
Clair Obscur: Expedition 33
Blue Prince
Descenders 2
Avowed
The Elder Scrolls IV: Oblivion Remastered
Doom: The Dark Ages
Wuchang: Fallen Feathers
Grounded 2
Robocop

It's a hell of a value for me. I only buy it on deep discount. I pay under $10 per month.
 
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Bonfires Down said:
If subscriber count is all that matters then the EA and Ubi subs should have collapsed long ago.
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They would have, if they were the primary distribution model for their respective companies, which they are not, as a result of which EA and Ubi software sales are nowhere near as cannibalized as they are for Microsoft.

What else?
 
Topher said:
What do you mean it isn't revenue? It is.
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It just sounded like from his statement that he didn't release the gamepass revenue. I mean this statement.


'While CEO Satya Nadella announced the milestone on the call, he did not provide specific revenue numbers for Game Pass.

Nadella also did not share subscriber numbers.'
 
Sebastian1295 said:
It just sounded like from his statement that he didn't release the gamepass revenue. I mean this statement.


'While CEO Satya Nadella announced the milestone on the call, he did not provide specific revenue numbers for Game Pass.

Nadella also did not share subscriber numbers.'
Click to expand...
we know it's nearly $5 billion in revenue. literally what this thread is about.
 
Sebastian1295 said:
It just sounded like from his statement that he didn't release the gamepass revenue. I mean this statement.


'While CEO Satya Nadella announced the milestone on the call, he did not provide specific revenue numbers for Game Pass.

Nadella also did not share subscriber numbers.'
Click to expand...

That is just saying he didn't give an exact number. Nearly $5 billion in revenue is still revenue. That's hardly meaningless.

Adding the quote and transcript to the OP.
 
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I guess we can do a little extrapolating using that number.

Maximum subscriber numbers if the subscriber base were homogeneous (which it isn't).

xboxsubs.jpg


If my math is wrong, remember that I'm a bending unit and not a calculator you filthy human.
 
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bender said:
Maximum subscriber numbers if the subscriber base were homogeneous (which it isn't).
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Problem is discounted subs are still very much in the mix. Which would actually suggest higher subscriber numbers in order to hit the revenue approximation. I find myself wondering if PC GP is starting to take off. Seems the most likely explanation given its still a reasonable cost. Which might also make it a prime target for the next round of cost increases. Or not if they have decided this is where to put the subsidy.
 
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Ashamam said:
Problem is discounted subs are still very much in the mix. Which would actually suggest higher subscriber numbers in order to hit the revenue approximation. I find myself wondering if PC GP is starting to take off. Seems the most likely explanation given its still a reasonable cost.
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This is true as are free subscriptions via Microsoft rewards program, but I'm assuming those are far enough of an outlier that it isn't going to mess with the numbers much. I'm also using faulty logic everyone subscribing for a year which certainly isn't the casa either, but it's some data to spitball with.
 
bender said:
I guess we can do a little extrapolating using that number.

Maximum subscriber numbers if the subscriber base were homogeneous (which it isn't).

xboxsubs.jpg


If my math is wrong, remember that I'm a bending unit and not a calculator you filthy human.
Click to expand...
Yeah, pretty much what I did.

They talked up 34 million subscribers in the past, so I'd wager they've actually fallen from that number, but, they've got more people paying for the higher tiers. Similar to how PS+ lost a million subs, but made more money because the re-gigged tiers pushed people to pay more. Which would explain why they don't wanna talk subscribers - they're lower than 34 million, despite the increase in revenue.
 
Vaquilla said:
If you're okay with playing what's on there, when it's on there, maybe.

I'd rather choose what I want to play and when I want to play it.
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That's why I do both. I subscribe for their games and everything else I like on there. What is not on GPU, I buy just like everybody else. I bought 16 games in the sales for 130 bucks yesterday. I'll be adding shinobi, ninja garden in august. That's what's good about having choices.
 
LakeOf9 said:
It... probably won't be. As a reminder, it took Spotify 10+ years and 100 million+ subscribers to break even. It took Netflix 15 years and 150 million+ subscribers to become profitable.

Game Pass is at a fraction of their user base, and the production costs associated with video games are substantially higher than those linked with movies, music, or TV. I am sorry to tell you that the math works against Game Pass at the best of times, and that's before accounting for any inflated expectations for it that may exist within the parent company after springing for a $70 billion acquisition.
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Netflix has always been profitable, but has often had negative cash flow because they were constantly growing. So gamepass could definitely be profitable on paper.
Gamepass has a fraction of the content that something like Netlfix has (500 vs 5000+) - plus they have add-on content which means they bring in money outside of just the subscription. And they can still sell the games.
Whether the whole thing is profitable in the sense we think of profit - who knows.
 
Bonfires Down said:
What else? Maybe stop acting like your opinion is fact.
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His opinion was grounded in logic. If you think he said something that was false, call him out on it. Provide the receipts, so to speak. Proper discourse can't happen if one side is doing all of the critical thinking and making all of the arguments while the other side is just complaining about what they're saying without providing any solid counterargument.

As an example, Netflix turned its first net profit in 2003. It started up in 1997, so that was ~6 years until it was turning a profit. At that time, they had around 1.5 million subscribers, and Netflix made no original content themselves.

Spotify started in 2006. Their first quarter with net profits was in 2018, 12 years later. Unlike Netflix, Spotify has never been consistently profitable at any point. In Q2 2025, Spotify set a record of 696 million monthly active users, and 276 million Premium subscribers. They also have a $100 million USD net loss for Q2 2025 despite record-breaking Premium subscriber count and monthly active users. Spotify has never made original content themselves.

Microsoft, on the other hand, forks over money to have third-party titles come to Game Pass AND loses money due to cannibalized sales for first-party titles on Game Pass. Not to mention that video game development takes FAR more time than music, movies, and TV shows, and the cost to make video games is on par with movies and TV shows.

This means that video games take longer to create, and they have the same (or higher) budget than the other mediums. All of this correlates to Game Pass having far less content than the other streaming services (because video games take far longer to make), and Game Pass needing far more subscribers than these other services (and/or a substantially larger subscription cost) to be profitable.
 
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ChorizoPicozo said:
Nearly? That was supposed to be it.
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I remember you thought it was supposed to be dead

Vaquilla said:
If you're okay with playing what's on there, when it's on there, maybe.

I'd rather choose what I want to play and when I want to play it.
Click to expand...

Gamepass subscribers don't sign a contract agreeing never to buy games that aren't on the service 🙄

LakeOf9 said:
It... probably won't be. As a reminder, it took Spotify 10+ years and 100 million+ subscribers to break even. It took Netflix 15 years and 150 million+ subscribers to become profitable.

Game Pass is at a fraction of their user base, and the production costs associated with video games are substantially higher than those linked with movies, music, or TV. I am sorry to tell you that the math works against Game Pass at the best of times, and that's before accounting for any inflated expectations for it that may exist within the parent company after springing for a $70 billion acquisition.
Click to expand...

As a reminder, Spotify and Netflix have no other distribution channel aside from streaming, no opportunities to make money off retail sales and they have to incur a staggering amount of charges for streaming.
It's daft as fuck to put the production costs for content that's on GP on the service alone, and it's a brain dead thing to even assume the $70bn spent on the Activision purchase to be included in GP's financials.

FFS man. This fails on logic in every single paragraph.
 
Moses85 said:
revenue isnt profit.

I guess its a massive loss
Click to expand...

Yep. It's massively losing money. Which explains why Nadella that's on a crazy cost cutting exercise to raise more cash for AI has not only left the service up, but is happy to talk up revenue in an investors briefing.

Confused Will Ferrell GIF
 
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I think they're not sharing sub numbers anymore because of the growth saturation that Phil once mentioned. Subs are not growing at a good rate anymore, so they are focused on increasing ARPU - which is most likely up now.

It is still not complete data but cherry-picked by Microsoft for shareholders, so meh.
 
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