Spotted by Windows Central, the LinkedIn account of a former senior business development manager at Microsoft, who was recently caught up in the company’s mass layoff of 9,000 people, provides a bit of insight into just how much the company is spending on bringing games into its Xbox Game Pass subscription service.
Iain MacIntyre, who was up until recently a senior business development manager at Microsoft, shares in the experience section of his LinkedIn page that he helped negotiate over 500 deals “ranging from $50k to over $50m, securing both indie hits and AAA titles for Game Pass.”
Obviously, very few games would be able to garner that $50M price tag to be added to the subscription service. If Microsoft hadn’t acquired Activision Blizzard King, you could probably bet that including games like Call of Duty or Diablo would be able to get closer to that $50M mark than the $50K mark. And while it might be a drop in the bucket compared to what Microsoft earns in a year, spending tens of thousands, even hundreds of thousands or millions on adding indie or AA-sized games into Game Pass every month is sure to add up.
Beyond the layoffs, Microsoft and Xbox have been spotlighted in the news recently, as there has been some confusion around whether Xbox Game Pass is a profitable service for Microsoft. For now, the final word on the subject seems to be that Game Pass is a profitable service, even when the costs that Microsoft incurs developing first-party games and launching them directly onto the service are factored in.
That said, the fact that there are deals that reach the $50M mark is probably part of why the former Arkane Austin studio head believes that Game Pass is an “unsustainable“ business model. It’s also probably part of why Microsoft reportedly has “utterly unrealistic“ expectations for the revenue Xbox is meant to bring in. Even though Microsoft realistically has the coffers that can allow it to spend millions, even billions, on Xbox and its services, it expects a sizable return for its investments. If Xbox isn’t able to meet those expectations, then it is very likely that darker days are still to come for Xbox and its studios.
