Microsoft Studios

Pass Notes

This analysis, published in October 2022, critically assesses the long-term viability and strategic direction of Microsoft's Game Pass subscription service.

• Xbox Game Pass generated $2.9 billion in revenue in 2021, but growth has slowed, with the service missing its internal 73% growth target for the 12 months ending June 2022 by posting only 28% growth.
• Phil Spencer stated that Game Pass is expected to remain at approximately 15% of Microsoft’s total gaming revenue, suggesting the company does not view subscriptions as a path to majority revenue dominance.
• Microsoft’s gaming division reported a 3% decline in revenue from games and services for the second consecutive quarter, attributed to a lack of both first-party and third-party content.