Game Pass is seeing huge growth on PC and cloud, but its future comes at a price

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Microsoft's Game Pass has long been touted as the best deal in gaming by the company's executives, and it's a notion that's hard to disagree with when you're offered access to hundreds of great games for a monthly subscription lower than that of Netflix. Now, new reports show just what a juggernaut the service has become.

"Game Pass as an overall part of our content and services revenue is probably 15 percent,” Xbox head Phil Spencer stated at The Wall Street Journal's Tech Live event.

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However, Game Pass' recent success hasn't come from Xbox console owners as you might expect. "PC Game Pass subscriptions increased 159% year over year," Satya Nadella, CEO of Microsoft, revealed in Microsoft's earnings call for the 2023 Q1 period.

"And with Cloud Gaming, we’re transforming how games are distributed, played, and viewed," Nadella continued, saying that over 20 million people have used Xbox Cloud Gaming to stream games to their device of choice. This is around double the number of people who used the service's streaming functionality just months ago according to the last Microsoft report from April.

Speaking on the topic at Tech Live, Phil Spencer provides more details that hint at Game Pass' future. “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."

This app-based future is backed up by a The Verge report that found Microsoft intends to build a "next generation game store" that will be available across many different devices, which will put Microsoft in direct competition with the likes of Google Play Store and Apple's App Store.

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While critics of cloud streaming rightly lean on the argument that worldwide internet speeds are currently a problem, it's clear that Microsoft is putting systems in place to dominate in the coming years as internet infrastructure improves. Their plans, however, will come with a price. “We’ve held price on our console, we’ve held price on games and our subscription,” Spencer stated. “I don’t think we’ll be able to do that forever.”