Microsoft says Xbox Game Pass is profitable as it sees subscription growth slow

Phil Spencer is the CEO of Microsoft gaming. Spencer spoke at The Wall Street Journal's Tech Live conference and said that 15 percent of Microsoft's overall revenue comes from the Xbox Game Pass.

According to Spencer, he now expects the Xbox Game Pass to stay at 10% to 15% of Microsoft's revenue.

Game Pass is an overall part of our revenue. It doesn't get bigger than that. 50–70 percent of our revenue comes from subscriptions, but we don't have a future where that's the case.

The growth of Game Pass consoles has slowed.

Spencer suggests that the Xbox Game Pass won't dominate Microsoft's gaming revenue. There are only so many people that can subscribe to the service on the Xbox.

Growth on PC is incredible. Spencer says that growth on console has slowed down due to the fact that people on console want to subscribe.

Image: Microsoft

More than 20 million people have streamed games on Xbox Cloud gaming, up from 10 million earlier this year, and Microsoft just revealed that PC Game Pass subscriptions have increased by 159 percent. It looks like PC is an obvious growth area for Microsoft.

Microsoft is building an Xbox mobile gaming store to take on Apple and Google, but it will face challenges in growing Xbox Game Pass on platforms likeiOS, where it's currently impossible to offer rival stores and even cloud gaming apps. Spencer believes that Microsoft is playing a long game on a mobile store.

We want to be in a position with content, players, and storefront capability to take advantage of, if you take a long-term bet. Microsoft is building a mobile store that will rely on games from both King andActivision.

Spencer talked about pricing at WSJ Tech Live. Spencer has said that changes could be on the way in the future, and that Microsoft hasn't increased the price of Xbox Game Pass or its consoles, that might not hold for much longer.

We have held the price on our consoles and games. Spencer thinks we won't be able to do that forever. I think at some point we will have to raise some prices, but we wanted to keep the prices we have.

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