fred420170
Member
They are now a 4trillion dollar company. I think their financial analysts know more than you do. in your basement.
[IGN] Xbox Game Pass Revenue Was 'Nearly $5 Billion for the First Time' Over the Last Year
- Thread starter Topher
- Start date
BlackTron
Member
If the game is making money, what do we need these people for again?
PlayStaytion
Member
Ryan McAffrey must make his own version of last stand podcast like Colin Moriarty, otherwise, he's irrelevant at this point.
Cakeboxer
Member
Correct, assumptions and observations. Some people just keep falling for it over and over but never end up on the ban list. Did you expect leaked documents and videos from the annual mod meeting?
Topher
Identifies as young
No, it's what I expected
SILKYSMOOTH30FPS
Banned
nextflix might an entertainment renting service, but when you look at what's on offer, and how much more expensive and how much longer game development takes, GP and Netflix cannot be compared.
DenchDeckard
Moderated wildly
It doesn't matter the reason. one is not worse than the other.
Go talk to someone who just lost their job at MS or a sony studio and tell them thats the reason why and see if they give a fuck.
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IFireflyl
Gold Member
You're right that we don't have full transparency into Netflix or Microsoft's exact payout structures, but that's not necessary to assess the larger point. The core issue isn't how much Microsoft pays developers. The core issue is that:
- Game Pass is still not profitable.
- Microsoft has claimed that Game Pass is profitable, but they also obfuscate all data surrounding profitability.
- Most sane people would agree that this is not the type of behavior it would expect a company to engage in, both publicly and with regards to the companies shareholders, if they could easily prove these assertions to be true.
- Major first-party titles like Starfield didn't recoup development + marketing budgets.
- The service requires massive upfront investments for content that takes years to produce (sometimes close to a decade!) and consumes more labor per unit than movies and TV shows.
- Netflix is profitable.
- Game Pass is likely not profitable based on the previously provided information.
- Netflix scales rapidly because shows are cheaper and faster to produce, and people consume them passively.
- Game Pass is bottlenecked by development time, development costs, and user time (games take 10–100 hours each).
- Netflix adds thousands of new pieces of content yearly. Game Pass adds a few dozen.
- It kills long-tail sales.
- It forces developers into launch-day payouts that don't cover ongoing revenue.
- It turns games into a commodity in a way that undermines premium pricing and value perception (e.g. why pay for the game when I can get it for "free").
- Game Pass = high cost, low ROI, low scalability.
- Netflix = high ROI, high scalability, higher profit margins.
BlackTron
Member
Complete disagreement, of course the reason matters. Sony made a mistake while having a lapse. For Microsoft, it wasn't a lapse. They're running the company the same way they always have for decades, where half the destruction is even seen as a good and planned part of the process and the other half is a bonus due to their own incompetence.
IFireflyl
Gold Member
It is anecdotal, but one example would be this post that I reported:
Maybe my reporting of this was just missed by accident, but moderation never did anything with this post or user. People get banned for making racist comments (rightly so), and I don't see the distinction here.
However, I don't want to make blanket statements. As I said, it's possible my reporting of that post was just missed by the moderation team. I'm not going to keep reporting it, because if they didn't miss it then I'll likely just piss someone off if they think that post is acceptable somehow.
Not sure why I got a ChatGPT breakdown… All I was saying is they DEFINTELY don't spend the same amount. Wasn't talking about quality or production. Just the simple fact Netflix far outspends Gamepass so it's a bullshit comparison.
Take a breath and relax.
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.
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
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."
IFireflyl
Gold Member
You got an educated breakdown of the two services, nothing more. Your response that they don't spend the same amount was pointless. Sony, Microsoft and Nintendo all have wildly different spending. People compare them all the time. You don't get to dismiss the comparison because the amount they spend, which is a single variable, is different (even wildly so).
And what about my response indicates that I wasn't relaxed? There was nothing in my response that indicated that I was doing anything other than providing context.
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Tobimacoss
Member
Dang. Yea, my data is from around 2023, I knew they were spending most of their revenues. But $29 billion is absolutely crazy. Most expenses of any other streaming service.
Even Disney+ and HBO Max are less than $8-10 billion.
But overall point is, it is much cheaper to fund and maintain a gaming service than it is to fund a movies and TV service. Plus only one other competitor (PS+ Premium) which refuses to compete properly.
I was LITERALLY disputing the point that Gamepass does not spend nearly as much as Netflix per year. Which I was right about. That's all.
Go touch some grass.
I think Netflix has a much larger active subscription worldwide than either of those and also charges more. Letting them spend so much more.
I completely agree.
Neofire
Member
Because overall it's not and it's also detrimental to developers.
Ozzy Onya A2Z
Member
Still cracks me up it's been stated many years now as profitable and large revenue. Keep on GAFfing though.
ByWatterson
Member
Exactly. If you're an adult with a job, and you even sort of regularly want to play games not on Gamepass, you simply won't have enough available waking hours to get the value out of Gamepass to reflect the money you pay in.
The only way to make the value work is to play only Gamepass games (which is what Xbox customers do now and why nothing sells over there).
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IFireflyl
Gold Member
Why do you keep adding an insult at the end of your comments when I am being civil? Are you 12 years old?
This was the full post:
Nothing about this post you were quoting said anything about Game Pass spending as much as Netflix. What they said was, "...production costs associated with video games are substantially higher than those linked with moves, music, or TV."
So good on you for disputing a point that nobody made, and then behaving like a child when people responded in a civil manner with relevant facts because we didn't understand that your point was nonsensical from the start.
It is objectively more expensive to fund and maintain a gaming subscription service than it is to fund a movies/TV service because there is an equally high cost and a longer development time to make games versus movies, music, and TV. Netflix has been profitable since 2003. And not in a "they said it so it must be true" way, but in a "they provided us proof in the form of revenue and expenses" kind of way. It took Netflix six years to be verifiably profitable. Game Pass has been operational for 8 years, and the only thing we know is that they said, "We're profitable. Source: trust us."
Microsoft should happily be showing the receipts on Game Pass' profitability, but they don't provide raw numbers for this to either the public, the SEC, or to shareholders. They only supply selective metrics. If Game Pass were truly profitable then they would be declaring this to the world. Everyone should be suspicious of Microsoft's profitability claims for Game Pass since they share specific revenue and market segment information for Azure, LinkedIn and Office 365, but not for Game Pass.
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calico
Member
Based on some of the optimistic accounting in this thread, operating the system costs nothing and the Game Pass marketing (which I see everywhere) costs nothing. Microsoft, apparently, assigns the development costs to Not-Game-Pass because the game isn't exclusively available on Game Pass.
'It's been stated as profitable' is meaningless if Game Pass expenses are being handwaved or creatively shifted elsewhere with the aim of being able to state that the service is profitable. Maybe it's profitable with honest and reasonable accounting and maybe it isn't.
It would also be reasonable to consider the negative effect Game Pass has on game sales on Xbox. Game Pass could be profitable and still be a mistake if it's causing the loss of a greater profit elsewhere in the business.
'It's been stated as profitable' is meaningless if Game Pass expenses are being handwaved or creatively shifted elsewhere with the aim of being able to state that the service is profitable. Maybe it's profitable with honest and reasonable accounting and maybe it isn't.
It would also be reasonable to consider the negative effect Game Pass has on game sales on Xbox. Game Pass could be profitable and still be a mistake if it's causing the loss of a greater profit elsewhere in the business.
Daniel Ahmad commented on this a long time ago, but it's impossible to find it amidst all the talk about GamePass.
Well, this is part of Phil Spencer's communication strategy, talking non-stop so that one lie is buried by another and another and another promise.
I had a hard time finding, for example, Phil promising that "the big Xbox games weren't released on PC" when they started making PC ports.
It's the same with all the information you search for about anything related to Xbox.
Xbox's strategy is to fill its brand communication with noise so they can fanaticize their fans.
That's why I expected I wouldn't be able to find ZhugEX's tweet saying that GamePass would need 50 million subscribers to break even.
adamsapple
Or is it just one of Phil's balls in my throat?
Gravemind
Member
It's more fun to just say xboc ded
And would it make a difference? Phil Spencer would be running around the internet with double-entendres like "it's profitable for us."
Gamepass is so sustainable that the production costs of day one games aren't even considered an expense... have you ever thought about having a service that sells products that have no production costs?
adamsapple
Or is it just one of Phil's balls in my throat?
The simple fact that Microsoft doesn't count the budget for its games that come out "day one game pass" as Game Pass "costs" is more than enough for everyone to know that Game Pass is far from making a profit with 25~35 million subscribers.Yes, your entire premise is wrong. Move on.
Mr Moose
Member
Mayyyyybbeeeee. But 100M by 2027 is something Phil said, or they'll dip.Yes, your entire premise is wrong. Move on.
He is Pinocchio though.
adamsapple
Or is it just one of Phil's balls in my throat?
I reckon that was said before the multiplat pivot, they're getting a lot more revenue now that way.
Mr Moose
Member
For sure. But I don't think PS sales should negate GP impact. They need a lot more subs. It's unfortunate, I think the PC day one and GP day one was a big mistake (along with the Series S, the Series X is a fine piece of HW though) and now Sony might be following them, the dumbasses. They've kind of fucked up their base by getting them to not want to buy games.
S0ULZB0URNE
Member
Mattyp
Not the YouTuber
PS5 sales are already 80%+ digital, you're not buying or owning anything already.
No PS6 SKU will come with a disk drive as standard.
Mr Moose
Member
adamsapple
Or is it just one of Phil's balls in my throat?
The Pro disc add-on experiment kind of leads me to believe that.
Instead of manufacturing two different SKU's, they have their entire pipeline devoted on making one SKU and sell the disc drive as an add-on.
A.Romero
Member
Netflix became profitable for the first time in 2003, it was founded in 1997.
It made a profit of about 6 million on a revenue of less than 300 million.
Netflix - Wikipedia
Xbox gamepass has been around in some form since 2017 and Phil Spencer declared it to be profitable for the first time back in 2022: https://www.gamespot.com/articles/p...ign-ups-slowing-down-on-console/1100-6508670/
The topic was discussed again a few weeks ago and Microsoft confirmed again it was profitable: https://insider-gaming.com/game-pass-killed-by-first-party-development-costs/
It could be argued that Microsoft doesn't take into account the lost revenue from their first party games that is swiped by Gamepass suscribers while Netflix does take into account all the money it invests in generating new content and acquiring streaming rights. However, Gamepass numbers do account for the money they spend on infrastructure and licensing content.
I wonder if they take into account the money spent on acquisitions although I'd guess that gamepass numbers do not include the revenue the games made by their acquired studios make so kind it makes it even more difficult, as you say, to determine it's real financial success.
ChorizoPicozo
Member
...People are still arguing about the profitability of this... thing... IT IS NOT. The damage Phil Spencer did to the gaming IQ discourse with his astroturfing modus operandi is one of his worst legacies
newtypepilot
Member
news flash: uber's revenue is also in the billions but it has never been profitable.
DryvBy
Member
It won't make it that long with Phil in charge.
IFireflyl
Gold Member
The issue is that Netflix was verifiably profitable, while the proof for Game Pass being profitable is solely hearsay. Everyone should be suspicious of this claim when Microsoft hides specific revenue and expenses from the public, from the SEC, and from its own shareholders. If Game Pass were actually profitable they would absolutely be showing the numbers, just like the do for Azure, LinkedIn, and Office 365.
S0ULZB0URNE
Member
Disc drive will come with a sku or be optional.
Mattyp
Not the YouTuber
It will be optional, the pro was just the test run.
DenchDeckard
Moderated wildly
How do you know its a lapse for Sony? Where is the evidence to prove otherwise?
Also, MS has changed up their entire business strategy in the last 5 years. They've literally pivoted in industry shaking ways into a third party and it seems to be working very well for them.
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The number is not without context, and revenue is certainly not 'meaningless' and cant be compared to play metrics.
In September 2024, Bloomberg reported MS was spending about $1 billion annually on content. There's certainly significant daylight between that and the ca $5bn revenue to carve out decent profits
Microsoft Spends $1 Billion a Year To Bring Third-Party Titles to Game Pass
It has been mentioned that Microsoft is parting ways with $1 billion a year to bring third-party games onto the Game Pass service.
insider-gaming.com
How does any of this relate to what I said?
Please try to read carefully before posting replies
This isn't an 'issue'. It's an assumption on your part, and certainly flies in the face of multiple statements by MS execs and doesn't really jive with reality. The idea that An MS that's cutting losses in their business units (closing down studios that can't deliver, killing struggling projects, eliminating console hardware subsidy) would still keep funding a subscription service that loses money…that certainly doesn't make sense.
This has since been clarified, and it makes zero sense to put the bulk of the budget of their games on GP. Their games get released simultaneously on console retail and Steam.
They've stopped disclosing GP subscriber numbers because of what they've already publicly acknowledged. Subscriber count growth has slowed significantly.
Microsoft does not specifically disclose profits from Azure or LinkedIn. I suppose that means they're also unprofitable ?
Ar¢tos
Member
- How much profit you make?
- My daddy has 4 TRILLION DOLLARS so it doesn't matter if I make any money at all because my daddy will always be rich and support me!
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Ashamam
Member
It has? My recollection is the retraction was because MS said 'when opportunity costs', ie lost sales were factored in. NOT that 1st party development costs were applied in some percentage to offset the obvious value advantage they give GP.
Amazing how you seem more concerned about the profitability of Xbox than folks who actually engage with the ecosystem.
The fact that you think 'market cap' = 'money available to spend' is also quite hilarious.
Ar¢tos
Member
I don't. I'm pointing out what the typical MS fanboy answer is when asked what gamepass profit looks like.
Reading stuff like this literally to try to look clever is another defensive action fanboys do.
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calico
Member
'They didn't shut it down so we can infer that it is profitable' is a leap. The decisions on what to cut will also consider the future, not only what is happening right now.
I would think Microsoft is always subsidising some parts of its business which are not profitable but which they believe will be down the line.
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