Xbox Game Pass on Track to Generate $5.5 Billion by 2025

Xbox Game Pass is set for a significant revenue boost, with analysts predicting it will generate up to $5.5 billion by 2025. This comes after Microsoft increased the prices of the subscription service following its merger with Activision. The price hike is expected to drive a substantial rise in revenue, marking a more than 200% increase compared to 2022.

According to Ampere Analysis, the average revenue per user is projected to grow by up to 35% by 2025. Piers Harding-Rolls, head of research at Ampere Analysis, attributes this growth to the recent price hikes and the consolidation of subscription tiers. Game Pass Ultimate, the most expensive tier, is expected to become more popular as users seek the best value for their money.

The Game Pass service has become a vital revenue stream for Microsoft, reducing its reliance on console sales. Phil Spencer, Xbox CEO, noted that Game Pass accounts for about 10-15% of Xbox’s annual revenue. The service made up to $1.7 billion in 2022, and the forecasted $5.5 billion in 2025 represents a significant leap.

Harding-Rolls also highlighted the importance of Call of Duty’s addition to Game Pass Ultimate. This move is expected to attract more subscribers to the Ultimate tier, further boosting revenue. The projected increase in consumer spending on the service by up to 15.3% in 2025 underscores the potential of Game Pass to transform Microsoft’s gaming revenue landscape.