Xbox Game Pass is NOT very profitable right now, Microsoft marketing boss admits
Xbox Games marketing manager admits that the subscription service isn’t making much money right now, but is important for the brand’s long-term goals.
As the long-running console war wages on, and with a fresh next-gen battle on the horizon, Microsoft has one major ace up its sleeve.
The Xbox Game Pass subscription service, aka Microsoft’s version of “Netflix for games”, is a huge draw for gamers who haven’t yet picked a side. That’s mainly down to its impressive library of new(ish) games, its focus on downloadable content and its innovative rewards system. Many have even pegged it as superior to its rival, Sony’s PlayStation Now.
There’s only one problem: it isn’t making much moolah.
In an interview with What’s Good Games, Aaron Greenberg, general manager of Xbox Games Marketing, admitted that the subscription service isn’t all that profitable for Microsoft – in the short term, at least.
“With Xbox Game Pass, Microsoft is focusing on over-delivering on value, even if it comes at the cost of profits in the short term,” Greenberg explains. “It’s a different mindset. You can either say, ‘How do we get as much profit out of each customer?’ or…‘How do we add as much value to our fans?’ If you do that, you build fans for life.”
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Xbox Game Pass: value for money?
It’s not a stretch to imagine how Xbox Game Pass might not be raking in the cash for Microsoft in the short term. The console-only service currently costs £7.99 per month in the UK, or £10.99 for the ‘Ultimate’ version (which includes access to Xbox Live Gold and the ability to play games on a PC as well as an Xbox).
In return for that relatively small monthly sum, you get unlimited access to a vast library of games. Just like Netflix, high-profile new titles come and go, while some – including platform-exclusives such as Halo 5, Gears 5 and Forza 4, as well as major third-party games such as Red Dead Redemption II – are Game Pass stalwarts. Not only that, but you can download each of them directly to your Xbox – no streaming required.
But while it might not technically be turning a profit, Xbox Game Pass is a major selling point when it comes to Microsoft’s games consoles. Which is no bad thing, given the imminent release of the Xbox Series X.
The ‘right thing’ for Microsoft
“When people feel like you’re over-delivering on value, they want to not only continue to use your service but they want to tell their friends about it,” says Greenberg. “The most powerful marketing is word-of-mouth marketing.
“For us, we just want to keep adding more and more value to Xbox Game Pass. Ultimately, we think long-term that’s the right thing for the business. In the short-term, yeah, Xbox Game Pass is not a big profit play. But we think long-term it works out good for everybody.”
Time will tell if he’s right. But with the upcoming Project xCloud, which will allow you to play Game Pass titles on your mobile devices, Xbox Game Pass could prove to be a real jewel in Microsoft’s gaming crown. With the festive scrap between the Xbox Series X and the PlayStation 5 fast approaching, Microsoft might find it needs it.