How much money does Microsoft make from Xbox Game Pass? It turns out, lots and lots of money.
Lots, as in billions of dollars.
The Brazilian Administrative Council for Economic Defense, or CADE, recently approved the upcoming Microsoft acquisition of Activision Blizzard. In CADE’s report of the forthcoming merger, the website Tweaktown noticed some details regarding Microsoft’s revenue from Xbox Game Pass.
According to the data made available from CADE, Game Pass generated $2.9 billion of revenue in 2021 for Microsoft. To compare, Xbox gaming as a whole generated $16.28 billion in 2021, according to public data provided by Microsoft. That means nearly 20% of the Xbox gaming revenue comes from Xbox Game Pass.
Tweaktown further speculates that the Game Pass subscriber count is somewhere around 18 or so million users. The last official count from Microsoft mentions 25 million subscribers, but it’s important to know that Tweaktown’s estimate does not account for PC Game Pass, just Xbox Game Pass. Still, that’s a pretty impressive number that shows how important the Game Pass brand is to Microsoft’s bottom line.
This isn’t the first time we’ve received news from Brazil’s look into Microsoft’s purchase of Activision Blizzard. In August, Brazil’s investigation resulted in several major publishers commenting on the Microsoft-Activision deal.
Sony has constantly expressed concern about the deal being approved and noted that no developer could develop a series as big as Call of Duty. Sony believes that Call of Duty’s pull is so influential that it determines what consoles people purchase. Sony also mentioned that Call of Duty is a big revenue stream for the company and worries about what Microsoft owning Call of Duty would mean for Sony moving forward.
Other publishers, like Ubisoft and Riot Games, didn’t share the same concerns. Riot even mentioned Naughty Dog, a Sony-owned studio, as a studio that can be a potential competitor in matching what Microsoft can accomplish in AAA games.
The Microsoft-Activision Blizzard deal is headed for approval, and Xbox head Phil Spencer feels confident it will be fully approved. “I feel good about the progress that we’ve been making,” Spencer recently told Bloomberg. “But I go into the process supportive of people who maybe aren’t as close to the gaming industry asking good, hard questions about ‘what is our intent? What does this mean?”
“I’ve never done a 70 billion-dollar deal, so I don’t know what my confidence means. I will say the discussions we’ve been having seem positive.”
Given that Brazil recently approved the deal, it seems that those discussions are indeed positive.
Spencer mentioned last month that he believes “that a thorough review will show that the combination of Microsoft and Activision Blizzard will benefit the industry and players.”
“We will continue to engage with regulators with a spirit of transparency and openness as they review this acquisition,” he added. “We respect and welcome the hard questions that are being asked.”
Activision Blizzard CEO Bobby Kotick also believes the deal with go through. “we still believe the deal is most likely to close in Microsoft’s fiscal year ending June of next year,” Kotick said. “We are fortunate to have already received approvals from a couple of countries, and the process with all of the regulators is generally moving along as we expected.” Kotick’s quote took place before the Brazilian approval.
Once the deal is wholly approved, you can expect games like Call of Duty and Overwatch to arrive on Xbox Game Pass.
“We intend to make Activision Blizzard’s much-loved library of games – including Overwatch, Diablo and Call of Duty – available in Game Pass and to grow those gaming communities,” Microsoft said in a press release last month. “By delivering even more value to players, we hope to continue growing Game Pass, extending its appeal to mobile phones and any connected device.”
These marquee franchises will undoubtedly add to the revenue that Game Pass provides for Microsoft, which is almost 20% of the total Xbox revenue for 2021.