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Microsoft’s video game subscription service Xbox Game Pass may be a fantastic value for money offer for Xbox gamers, but many have wondered where the profit is for Microsoft. Unsurprisingly, there isn’t much.
Speaking on an episode of the What’s Good Games podcast, Xbox marketing general manager Aaron Greenberg explained that, while the subscription service isn’t extremely profitable, Microsoft is in a very early privileged position where they don’t need to worry about short term profits.
“We always kinda laugh, we just [say], ‘Listen, please don’t worry about us. Microsoft is gonna be alright,’” Greenberg explained. (Transcribed by VG247.)
Today @andrearene and @BlondeNerd spoke to @Xbox's @aarongreenberg about Xbox Game Pass Ultimate profitability, "You can either say, how do we get as much profit out of each customer, or do you pivot that…how do we add as much value to our fans?" (see full interview tomorrow!) pic.twitter.com/QUl5yNamhq
— What's Good Games (@WhatsGood_Games) July 23, 2020
Greenberg revealed that there’s a type of mindset when building a subscription based platform – a lá Netflix – compared to other forms of business, one that is dependant on long-term success.
“It’s a different mindset, because if you do optimise for profit… you can either say, “How do we get as much profit out of each customer?’ Or, do you pivot that [to its] opposite and say, ‘How do we add as much value to our fans, how can we actually over-deliver on value? And if you do that, you build fans for life.”
Much like Netflix, Spotify or Amazon Prime, Greenberg explained that the growth of Xbox Game Pass over time is what’s important, something the company is very focused on supporting going into next generation.
“Ultimately, we think long term that’s the right thing for the business, and will have long-term benefits for us. But, in the short term, yeah, it’s not a big profit play.”
Xbox Game Pass was a huge part of Microsoft’s recent Xbox Games Showcase last week – listen to our thoughts here – that revealed a bunch of games coming to the subscription service: Forza Motorsport, Avowed, Grounded, Stalker 2, Fable, Halo Infinite, and many more titles big and small.
With other features being added to Game Pass over time, like Project xCloud game streaming, Microsoft seems set to continue adding value to the service.