After rumors recently spread that theXbox Game Passisn’t profitable, sources have now revealed that the service does turn a profit regardless of the loss in profit for first-party titles. This news follows mass layoffs at Xbox and Microsoft, which has both gamers and industry professionals concerned about what the tech giant will cut next. Many consider theXbox Game Passto be one of the best deals in gaming, but others consider the model to be unsustainable.
Recently, Arkane Studios FounderRaphael Colantonio questioned the Xbox Game Pass model, suggesting that it could damage the industry as a whole. This criticism is rooted in the idea that it hurts small and independent developers when games are easily accessible via such a service, as fewer customers will purchase the game outright. While there is some truth to this critique, it’s hard to say for sure which method would return the biggest profits for developers, and it’s difficult to overstate the impact that Xbox Game Pass can have in terms of advertising.
According to a tweet from Christopher Dring, sources with inside knowledge have confirmed that Xbox Game Pass is profitable in spite of the costs for first-party titles. Dring noted that being able to publish first-party Xbox titles on PS5 has allowed studios to “make stronger margins on premium sales,” offsetting some of the losses in first-party sales.The Elder Scrolls IV: Oblivionon PS5is an excellent example of this, as it has allowed Bethesda to profit from a huge market that would otherwise have been off-limits.
Xbox Game Pass is Profitable Even When Factoring in First-Party Losses
To be perfectly clear, this essentially means that Microsoft has likely done the math and determined that even if access to first-party titles on Xbox Game Pass does impact individual game sales on some consoles, the company still makes more money from this service than it would otherwise. Given that few, if any, of therecent Xbox layoffs stem from the Game Pass, it would seem that the sources making this latest claim are probably accurate.
A majority of therecent layoffs have hit developers like Halo Studios, Rare, Activision, and Romero games getting hit the worst. While decisions such as these are never easy or popular, it would appear that the Xbox Game Pass has avoided the same fate as other departments at Xbox for the time being, and if it truly is profitable, chances are it won’t be disappearing anytime soon.
