icrosoft's recent Game Pass price hike will lead to a spike in earnings, at least that's what analysts are predicting. Ampere Analysis head of research Piers Harding-Rolls gave an interesting prediction regarding Game Pass revenue forecasts, with the subscription service expected to achieve a whopping $5.5 billion in annual earnings in 2025.
The reason? Ultimate's price increase is undoubtedly a catalyst for this growth, however it's the perceived value fracturing of the subscription tiers--the entire removal of the Console tier and its "degraded" Standard tier replacement--that will ultimately (pun intended) urge users towards the more expensive $19.99/month tier. Note that this estimate reflects the totality of Xbox Game Pass, including options on console and PC, as well as revenues earned via cloud gaming access.
Harding-Rolls explains in a research note:
To put those numbers into perspective, we've been able to calculate Xbox Game Pass revenues based on two sources: the Brazilian anti-trust regulatory body called CADE, and Xbox CEO Phil Spencer himself.
Based on findings published by CADE in 2022, which we were the first to report on, the totality of Xbox Game Pass made $2.9 billion throughout 2021. This information was later redacted and taken out of the regulator's report.
Then some time later, Xbox CEO Phil Spencer said that Game Pass makes between 10-15% of annual Xbox content & services revenues. We did the calculations and the ranges look like this:
- 2021 Game Pass Revenue - Between $1.258 billion and $1.887 billion
- 2022 Game Pass Revenue - Between $1.197 billion $1.796 billion
If Harding-Rolls' prediction is accurate, Game Pass' 2025 revenues will increase by over 200% over these top-end values.
Also, Game Pass' $5.5 billion would make up approximately 35% of Xbox's annual FY23 revenues of $15.47 billion.
Via TweakTown
The reason? Ultimate's price increase is undoubtedly a catalyst for this growth, however it's the perceived value fracturing of the subscription tiers--the entire removal of the Console tier and its "degraded" Standard tier replacement--that will ultimately (pun intended) urge users towards the more expensive $19.99/month tier. Note that this estimate reflects the totality of Xbox Game Pass, including options on console and PC, as well as revenues earned via cloud gaming access.
Harding-Rolls explains in a research note:
To put those numbers into perspective, we've been able to calculate Xbox Game Pass revenues based on two sources: the Brazilian anti-trust regulatory body called CADE, and Xbox CEO Phil Spencer himself.
Based on findings published by CADE in 2022, which we were the first to report on, the totality of Xbox Game Pass made $2.9 billion throughout 2021. This information was later redacted and taken out of the regulator's report.
Then some time later, Xbox CEO Phil Spencer said that Game Pass makes between 10-15% of annual Xbox content & services revenues. We did the calculations and the ranges look like this:
- 2021 Game Pass Revenue - Between $1.258 billion and $1.887 billion
- 2022 Game Pass Revenue - Between $1.197 billion $1.796 billion
If Harding-Rolls' prediction is accurate, Game Pass' 2025 revenues will increase by over 200% over these top-end values.
Also, Game Pass' $5.5 billion would make up approximately 35% of Xbox's annual FY23 revenues of $15.47 billion.
Via TweakTown
