Xbox Boss Claims Game Pass Is Already Profitable, Hints at Possible Price Raise

The head of Xbox Phil Spencer shared that Xbox Game Pass accounts for around 15% of gaming revenues for Microsoft and hinted at future Xbox console, game, and subscription price increases.

During The Wall Street Journal’s Tech Live conference, Xbox boss Phil Spencer dispelled rumors that the company's subscription service Xbox Game Pass is unprofitable. According to Spencer, Game Pass accounts for around 15% of gaming revenues for the company. 

"I think it will stay in that 10-15% of our overall revenue, and it's profitable for us," Spencer said (via The Verge's Tom Warren).

The head of Xbox, however, noted that the growth of the service on consoles has slowed down recently, saying that "at some point, you've reached everybody on console that wants to subscribe." Meanwhile, the number of Game Pass subscriptions on PC, on the contrary, has grown significantly, according to Spencer.

In addition, the Xbox boss hinted that Microsoft could increase the price of Xbox consoles and games in the future.

In August, Sony announced that the recommended retail price of PlayStation 5 would be increased in several countries. Following this announcement, many wondered if Microsoft, whose Xbox Series X|S is a primary competitor to Sony's PlayStation 5, would take similar steps.

At the time, Microsoft assured players that it doesn't plan to raise the price of its consoles. However, now Spencer noted that the company will have to raise prices at some point. 

"We've held price on our console, we've held price on games... and our subscription. I don't think we'll be able to do that forever. I do think at some point we'll have to raise some prices on certain things," he said.

Spencer also touched upon the company's idea of building a "next-generation game store". It was previously reported that Microsoft intends to build its own mobile gaming store to rival Apple's App Store and Google's Google Play. The company detailed its plans regarding the mobile gaming store in a filing to the UK's competition regulator CMA saying that it would leverage Activision and King games.

In its ambitious effort to grow Xbox Game Pass on platforms like Android and iOS, Microsoft could face several challenges including the fact that it’s currently impossible to offer rival stores as well as cloud gaming apps on iOS.

During his speech at WSJ Tech Live, Spencer acknowledged those challenges but noted that the creation of Microsoft's own mobile games store is a long-term plan.

"If you take a long-term bet, which we’re doing, that we will be able to get access to players on the largest platforms that people play on – Android and iOS phones – we want to be in a position with content, players, and storefront capability to take advantage of it," he said.

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