The video game industry has grown by leaps and bounds over the past few years, and Microsoft seems to be reaping the benefits of that by way of its ultra-successful Xbox Game Pass initiative. Fueled at least partially by extended lockdowns in many areas which made gaming an ideal hobby to adopt, the Xbox Game Pass service has only picked up steam since its 2017 debut, and recent inquiries concerning Microsoft’s business ventures ahead of the Xbox and Activision merger revealed that the service did incredibly well in 2021.
Brazil’s Administrative Council for Economic Defense recently published a report that made transparent its reasons for approving the well-publicized Activision acquisition, and it revealed that Xbox Game Pass alone made up roughly eighteen percent of Xbox’s total revenue in 2021. This figure takes both software and hardware sales into account and indicates that, while software sales still account for a majority of the financial gains generated by Xbox, the Xbox Game Pass service has been cultivated into a hugely important third source of revenue.
Xbox Game Pass made just shy of three billion dollars in 2021, and, given that the service officially crossed the twenty-five million subscriber threshold in early 2022, this year’s Xbox Game Pass earnings ought to be similarly staggering. Plus, with Sony having recently followed suit with its reworked PlayStation Plus Premium program, it seems that services like these may quickly become the norm.
That said, subscription services such as these rely heavily on big-budget exclusives to maintain relevance, and that is an area in which Xbox has, in recent years, notoriously stumbled. The Xbox One was disastrously deficient in that department, and, with the lifespan of newer marquee titles such as Halo Infinite appearing to wane well in advance of what was expected, this could continue to be an area of concern. However, should the Call of Duty franchise become an Xbox console exclusive in the coming years, it could easily shore up Xbox Game Pass’ lineup of titles.
While it seems like a relatively surefire venture in hindsight, Microsoft’s subscription service gambit wasn’t always destined to succeed; while the services weren't completely analogous, Google’s recently-ended Stadia project proved that convenience alone wouldn’t be enough to win over gamers. Had Microsoft focused on creating a game streaming storefront—something that seemed to be very trendy not long ago—things could have turned out very differently. Fortunately, Xbox Game Pass is now a proven success that is likely to continue to influence the industry for years to come.
Source: TweakTown