Microsoft faces tough questions about Game Pass making real money since the service started back in 2017. Gaming experts always wondered if the tech giant could keep losing cash forever just to build up subscribers. Phil Spencer from Xbox kept telling everyone the subscription plan was working great and bringing in profits. He claimed the service was doing amazing things for both Microsoft and gamers who signed up.
Recent studio shutdowns and slow subscriber growth have people asking hard questions again. Many industry watchers think Microsoft picked the wrong strategy and might crash hard later. Chris Dring from The Game Business just revealed some shocking details about how Microsoft counts its Game Pass profits. He found out the company only looks at outside fees, marketing costs, and basic service expenses when calculating if Game Pass makes money.
Microsoft completely ignores the lost sales from its game studios when figuring out profits. First-party developers like Halo Studios and The Coalition never get counted as costs against Game Pass earnings. The situation gets much worse when you think about Bethesda and Activision Blizzard games going straight to subscribers. Major hits like Call of Duty and Diablo could lose millions in regular sales revenue. Nobody knows how long Microsoft can afford to give away blockbuster games for almost nothing.
Recent studio shutdowns and slow subscriber growth have people asking hard questions again. Many industry watchers think Microsoft picked the wrong strategy and might crash hard later. Chris Dring from The Game Business just revealed some shocking details about how Microsoft counts its Game Pass profits. He found out the company only looks at outside fees, marketing costs, and basic service expenses when calculating if Game Pass makes money.
Microsoft completely ignores the lost sales from its game studios when figuring out profits. First-party developers like Halo Studios and The Coalition never get counted as costs against Game Pass earnings. The situation gets much worse when you think about Bethesda and Activision Blizzard games going straight to subscribers. Major hits like Call of Duty and Diablo could lose millions in regular sales revenue. Nobody knows how long Microsoft can afford to give away blockbuster games for almost nothing.
