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Xbox Game Pass generated $2.9 billion in revenue in 2021, according to Brazil regulatory documents

Hero of Legend

Hero of Legend

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Microsoft reveals how much money Game Pass actually makes

Microsoft has revealed Game Pass earnings data to Brazilian regulators to help build a favorable case for the upcoming merger with Activision-Blizzard.
www.tweaktown.com www.tweaktown.com
Right now multiple worldwide regulators are sifting through tons of games industry data. The massive Microsoft-Activision merger is looming and regulators have collected libraries of data, figures, testimonials, and expert opinions as they try to determine if the mega-merger is good for consumers and the $198 billion video games market as a whole.

Some regulators like Brazil's Administrative Council for Economic Defense (CADE) have already approved the merger. CADE released a public document outlining its thought process on the approval and included a ton of data on Xbox, PlayStation, Nintendo, and others.

One specific figure shows just how much Microsoft makes from Xbox Game Pass on consoles. According to the data, Xbox Game Pass generated $2.9 billion from consoles in 2021. Based on data publicly available by Microsoft, Xbox gaming generated a total of $16.28 billion in calendar year 2021.

This means Xbox Game Pass made up roughly 18% of Microsoft's total yearly Xbox revenues ($16.28 billion), and nearly 30% of its games and services revenues ($12.581 billion) for the period.
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88846_1_game-pass-made-2-9-billion-in-2021-or-18-of-total-xbox-revenues.jpg


Special thanks to Saucycarpdog at Era for posting this there.

IMO this is... not good considering how much MS spend on this service and how much they to me seem to literally depend on it nowadays, but maybe I'm misreading this. What say you?
 
Doesn't look bad to me, but I can't really judge the result without knowing Sony's numbers.
 
It pretty much lines up with what their subscriber count is. They had 25 million at January 2022, $2.9 billion/25million=$116/per user. Ultimate is $15/month, Regular is $10. Keeping in mind they do sub deals all the time (like $1 for a month or 3) as well as the growth from 18 million to 25 million, that just seems to match.
 
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Hero of Legend said:
www.resetera.com

Xbox console subscription services generated $2.9 billion in revenue in 2021, according to Brazil regulatory documents

https://www.tweaktown.com/news/88846/microsoft-reveals-how-much-money-game-pass-actually-makes/index.html?utm_source=dlvr.it&utm_medium=twitter&utm_campaign=tweaktown
www.resetera.com www.resetera.com

Food for thought. To me, this is pretty terrible considering how much MS pour into Game Pass. Anyone going to make a new thread?
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while the number feels a bit underwhelming, gamepass acts as a gateway into the Xbox ecosystem, an attractive way to convert players from previous gen to next-gen, ideally u want them to buy games rather than gaming through gamepass for most of their gaming

gamepass + Xbox S syngergizes very well so it'll be interesting how the numbers improve over time as well as xb series sales over time, theoretically they can double their userbase over ps when people upgrade from Xbox S to Xbox X when they are ready to beef up their console, while a PS5 digital edition doesn't need an upgrade especially when many are forced to buy an S since the X is produced less

I dont think xb/ps5 will have mid-gen refresh until 7-8 years into their life and by that time they might just release next-gen instead due to the severe shortages
 
How much do you think they should make?

They had 18M in early 2021 then 25M this January. Let's say the average in 2021 was 21M a month. Regular Game Pass is $10 and Ultimate is $15

21,000,000 * $10 * 12 months = $2,520,000,000

Maximum of $3.78B a year if everyone had Ultimate.

$2.9B from 2021 is where it should be, and I think this is only counting Xbox, not PC?
 
Seems good to me, especially if we take MS at their word and gamepass subs have increased engagement and spending. Plus its not including gamepass PC. This probably covers the cost of the entire service, not counting the rest of the revenue Xbox makes.
 
Welfare said:
How much do you think they should make?

They had 18M in early 2021 then 25M this January. Let's say the average in 2021 was 21M a month. Regular Game Pass is $10 and Ultimate is $15

21,000,000 * $10 * 12 months = $2,520,000,000

Maximum of $3.78B a year if everyone had Ultimate.

$2.9B from 2021 is where it should be, and I think this is only counting Xbox, not PC?
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Oh yeah that's a good point, regular PC gamepass wouldn't be counted
 
Microsoft is playing the long game and they are in the growing phase of their service. The results of 2021 are not the endgoal, but a fraction of what they expect to reach in 10-15 years.
 
Microsoft said they had 18 million and January of 2021 and 25 million in January of 2022 so that would give an average revenue per user between $116 and $161 per user every year or $9.67 to $13.43 per month. Those seem like pretty good figures to me considering that many users are likely using the $10/month plan or the various deals to get free trials or discounts on the service. This also doesn't include other benefits like increased purchases of DLC and microtransactions. As long as Microsoft can continue growing its subscriber base, this seems like a healthy amount to earn per user.
 
MegaXZero said:
It pretty much lines up with what their subscriber count is. They had 25 million at January 2022, $2.9 billion/25million=$116/per user. Ultimate is $15/month, Regular is $10. Keeping in mind they do sub deals all the time (like $1 for a month or 3) as well as the growth from 18 million to 25 million, that just seems to match.
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Its above 116/per user since the sub count changed from 18 to 25 for the entire year. I would bet its around 130-140.

Thats a buttload of money. Especially since GP users actually buy other games/mtx. Youd struggle to find users that spend more on other ecosystems.
 
People misunderstand the purpose of GP.

It's not Netflix
It's Amazon Prime.

It's goal is to get people in the ecosystem so they can monetize people in additional ways like software sales or advertising. Looking at it as the sole revenue stream doesn't make sense.
 
Since this is only Xbox Game Pass and the number doesn't include PC Game Pass I think this is a very solid result.
 
reksveks said:
People misunderstand the purpose of GP.

It's not Netflix
It's Amazon Prime.

It's goal is to get people in the ecosystem so they can monetize people in additional ways like software sales or advertising. Looking at it as the sole revenue stream doesn't make sense.
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Look at Japan. Xbox One was lucky to get one shelf. Now...



Xbox's entire presence is off the back of Game Pass.
 
many people would be using the $1/discount deal too
 
The NSO numbers are likely overestimated. The last reported numbers were 32 million as of September 2021. That's likely including a number of family plans as well. If we assume they were all at the $20 a year, that would be $640 million. To get to that with the expansion pack assumes nearly 10 million subscribed without family plans. Hard to actually estimate how well it performed but, I'm assuming the Expansion Pack did decent and only a small portion does the family plan so I guess somewhere in the $800 million range
 
toutoune134 said:
Microsoft is playing the long game and they are in the growing phase of their service. The results of 2021 are not the endgoal, but a fraction of what they expect to reach in 10-15 years.
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Agreed. The true potential of GamePass will start to unfold once TES6 and CoD start appearing on the service.
 
Astrogamer said:
The NSO numbers are likely overestimated. The last reported numbers were 32 million as of September 2021. That's likely including a number of family plans as well. If we assume they were all at the $20 a year, that would be $640 million. To get to that with the expansion pack assumes nearly 10 million subscribed without family plans. Hard to actually estimate how well it performed but, I'm assuming the Expansion Pack did decent and only a small portion does the family plan so I guess somewhere in the $800 million range
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10m solo users that doesn't have a family is pretty feasible, NSO also has 1 and 3 month tiers which some people might buy just to test it out or to play certain games then decide to upgrade later, add in expansion pass upgrade and 932m looks realistic

I think alot of people would have also got the family plan even if its just for 2 people you're already saving when it supports up to 8 people, so anyone with 2 switch players in 1 household would pay the extra $5 even if only 1 person is really interested

also any 2 people even if they aren't in the same household can take advantage of the family plan and already save over the solo

936m/32m gives us $29.25 average, which is close to half way between $20 and $35, any 1m or 3m plans is easily covered by the expansion pack upgraders as it only takes 5-10% of the 32m to upgrade to cover it + more, if anything the 936m figure is more likely underestimated rather than over

if gamepass can get $100+ average with only 25m subs then NSO with 32m averaging $30 is likely since 90% would be buying yearly or family pack while $10-15 p/m is more likely for gamepass, nintendo releasing the expansion pack with increased price tells us many are willing to spend more than they currently are
 
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I'm pretty sure Nintendo doesn't count by subscription but, by accounts covered by NSO. Doing it by subscription is like HBO not counting the people getting subscriptions through AT&T plans. It's possible but, they have more impressive number by doing it the other way. Family subscriptions would then bring the cost down so average cost per user is less than $20. Converting people to the Expansion Pack would take time too. Base NSO took 6 months to get 9.6 million subs so, achieving 10 million in less than 3 months is absurdly fast especially when that first 3 months were when N64 emulation had the most criticism and before the Booster Pass announcement.
 
We sure this is just Gamepass and not all subscription services, like Xbox Live Gold?

I question this because of Sony's estimated percentage on the right side. Most of their subs in 2021 are PS+ and not Now.
 
Astrogamer said:
I'm pretty sure Nintendo doesn't count by subscription but, by accounts covered by NSO. Doing it by subscription is like HBO not counting the people getting subscriptions through AT&T plans. It's possible but, they have more impressive number by doing it the other way. Family subscriptions would then bring the cost down so average cost per user is less than $20. Converting people to the Expansion Pack would take time too. Base NSO took 6 months to get 9.6 million subs so, achieving 10 million in less than 3 months is absurdly fast especially when that first 3 months were when N64 emulation had the most criticism and before the Booster Pass announcement.
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only need about 2m expansion pack upgraders to have the math work out, counting family sub by accounts gives higher total subscriber numbers but less asp, so it depends what they prefer to showcase, ie. when promoting the price its good to show that the family sub works out to less than $5 per account but counting it as 1 sub gives higher asp in financial statements where more profit with less users looks better than slightly more sub numbers but alot lower asp

when NSO released the switch userbase was alot lower, by the time expansion came out it was 4-5x the total userbase, NSO having more value and more switch games that require NSO, so by that time more users subscribing at a faster pace than before isn't unrealistic
 
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NediarPT88 said:
We sure this is just Gamepass and not all subscription services, like Xbox Live Gold?

I question this because of Sony's estimated percentage on the right side. Most of their subs in 2021 are PS+ and not Now.
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This was pointed out in the thread on the other site as well. But yes, it would appear as though something's not adding all the way up here. Not sure what to make of it.
 
Almost 3 billion is pretty good, since we’re not even counting actual game sales and microtransactions and so on in that number yet.
 
Do we have the complete document ?

These numbers seam to be good for me.
Not huge or impressive but this service will continue to grow in newt years, it's still the beggining.
 
Great results!
116$ average per user contradicts the general perception that gamepass numbers are inflated because of 1$ offer.
This 25 M subscritors don't leave only MS 116$ , they leave extra money of all the purchases they do on the store. In Addiction to that some of those players are new to the ecosystem (like me), so its a Win/Win situation.
 
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NediarPT88 said:
I question this because of Sony's estimated percentage on the right side. Most of their subs in 2021 are PS+ and not Now.
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So if I recall a Video on the topic correctly, Brazil keep compared GP to PS+ not PS Now. Which the video thought was weird. It is possible that’s what’s happening here.
 
Hero of Legend said:
So apparently the number is actually from all sub services and not just Game Pass? It's what people have found out seemingly at Era. That's even worse if that's the case IMO.
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Ignoring the Bethesda and Activision-Blizzard purchases, if Game Pass is only half that, it should still be more than profitable for Microsoft. We aren't close to the stage where sub services up end individual game purchases too since Microsoft still made another $10 Billion+ from the rest of their gaming division. We are still in the early growth phase too so, the only concern is if Game Pass fails to grow its subscriber base
 
Hero of Legend said:
So apparently the number is actually from all sub services and not just Game Pass? It's what people have found out seemingly at Era. That's even worse if that's the case IMO.
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How? Why are you thinking these results are bad?

Xbox generated $16B in 2021. Game Pass / "subs" did $2.9B. Do you think Xbox is relying on Game Pass like you say in the OP?

This year, 2022, Game Pass probably generates less than $4B. Are you aware that if Game Pass had 50M subs, at best it'll bring in less than $7B, assuming Ultimate is 33% and the regular is 67%.

The entire Xbox division in 2015 made $9.2B in revenue.

Game Pass is a multi billion dollar business and is growing. Game Pass will never replace the revenue generated by the rest of the division. These numbers are not bad, in fact they are great. There's a reason why Microsoft is willing to invest $69B for Activision.
 
Welfare said:
Game Pass will never replace the revenue generated by the rest of the division.
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Right, it doesn't need to and isn't expected to. It may (long term) supplant premium sales, but it's always going to coexist with micro-transactions and f2p products.

ABK at 69 billion is about far more than GP. Of course it will have a very big impact there (mainline CoD and the premium Blizzard games), but ABK represents a major business diversification for Xbox. Half of ABK's revenue was from MTX in 2020, I expect probably this figure will increase in the future. ABK has launched two major F2P games this year and more will come soon, across both mobile and PC/Console. The entire King side of the business has nothing to do with gamepass, and the console/PC F2P products also probably won't have anything to do with it beyond "wow, you get a bonus cosmetic item for being an GPU subscriber" type stuff. World of Warcraft will (probably) keep the subscription and (probably) won't include the expansions in GP, at least at the base tier.

On top of all of this, the expectation is that CoD will remain on PS and also expand to Nintendo hardware for the forseeable future. So while GP is definitely turbocharged by it, the ABK division of Xbox will still mostly be generating revenue through the channels it already does pre-acquisition.
 
Hero of Legend said:
IMO this is... not good considering how much MS spend on this service and how much they to me seem to literally depend on it nowadays, but maybe I'm misreading this. What say you?
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I'm seeing this as a "all according to keikaku" type development.

I.e. Microsoft is eyes-wide-open with the costs it will take to build up their "final form" of what they want Xbox to ultimately be. Which is essentially their own metaverse that combines subscription services w/ micro-transactions with strong lock-in due to their vast stable of (eventually) exclusive content. All available on any type of device.

They are skating to where they see the puck 10 yrs from now and willing to eat these sizable early losses. Not many other companies can subsidize these initiatives like they can. And one of those potential competitors just waved the white flag already (Google).
 
People are thinking $2.9b is bad?

For me is better than expected considering that is easy to subscribe to Gamepass not paying full price.
 
I was going to mention, glad it is noted, this is all sub services not just Gamepass. I think it does show that Gamepass is still low in sub revenue.

If we assume similar rates to PSN, XBL Gold without GP would have 25M subs and resulting in $1.8B in rev.

So the addition of GP has likely led to $1B+ in sub revenue. Its hard to determine exactly how many users have Gold, GP or both via Ultimate but we can estimate.

25M is what the total of online subs that need to be met (whether through Gold, Ultimate or the $1 deal) and 25M GP subs need to be met (normal, Ultimate or $1 deal).
You can solve the equations for:
  • 9.17 M -> $1 deal
  • 8.84 M -> Gold
  • 9.17 M -> GP
  • 6.66 M -> GPU
= $2.99B , 25M online subs and 25M GP subs.
= 37% on the $1 deal
 
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