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Maicrosoft spends Over $1 billion on third-party games, says Phil Spencer

by Samir Gautam
December 3, 2023
in News
Reading Time: 2 mins read
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Xbox Game Pass

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Xbox’s Chief Financial Officer Tim Stuart had previously stated that Game Pass would be available on all gaming screens, but Phil Spencer, his boss, says we shouldn’t anticipate such a rush: Regarding the future of Xbox Game Pass, the Xbox CEO was more circumspect in an interview with Windows Central:

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“First off, we don’t aim to bring Game Pass to Nintendo or PlayStation. Not in our plans, that is. My main concern is how we can keep coming up with new ideas for those who have committed to our [Xbox] hardware platform. And what steps can we take to ensure that they are satisfied with their investment in what we have created?

Xbox Game Pass is a successful business, and Microsoft CEO Phil Spencer disclosed in an interview with Windows Central that the platform spends more than $1 billion annually on third-party content.

“We have a service that is financially viable, meaning it makes money, in Game Pass,” Spencer explained. Over $1 billion is invested annually in the market to support third-party games that are added to Game Pass.

“With Game Pass, we have access to a wide range of games from the biggest titles to obscure indie titles that, until you play them, you never would have guessed you’d enjoy. Thinking about “how do you get everybody playing my game” is crucial if you’re an independent publisher.

Spencer on Xbox

Even though Microsoft doesn’t seem to care about hardware, Spencer makes it clear that innovative features are what set the Xbox apart from the competition and that new hardware, features, and even achievements are in the works. The Xbox series isn’t selling very well. He would like to maintain the present solutions (Valve Steam Deck, Asus ROG Ally, Lenovo Legion Go) and there are no intentions to develop a portable PC.

While attending the Comic Con Experience in Sao Paulo, Spencer also talked to Bloomberg about the significance of mobile to Microsoft and the company’s approach to it.

“We’re actively working on it today, not just on our own but also in conversations with other partners who would like to see more options for how they monetize phones. It’s a significant component of our strategy.” We discussed choice, and as of right now, your smartphone does not provide you with any. We need to be strong across a wide range of displays if Xbox is to be relevant not only today but for the next ten, twenty, or even more years. And that will occur far sooner rather than in a few years! The “Xbox store,” according to Tom Warren of The Verge, may open as early as 2024.

Epic Game becomes the partner

Epic Games is probably one of the partners because the firm is battling both Apple and Google to obtain games from sources other than their app stores and to avoid having to pay a 30% profit margin on each purchase. It makes sense for the two businesses to collaborate because Microsoft has previously publicly supported Tim Sweeney’s firm (particularly given Sweeney has long since buried the hatchet despite being a bit of a port buddy in the past).

If solely due to their 30% mobile profit margin, Apple is placed third among gaming businesses in terms of revenue (the former was/is directly associated with Apple Arcade, and the latter with Google Stadia). Google is ranked sixth. Given how quickly the mobile market is expanding compared to the PC/console combo, Sony’s desire to get into this market is understandable.

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