While the Xbox Team is gunning on growing its subscriptions like Xbox Game Pass and Xbox All Access, the team isn’t making big money from the former subscription service. This information comes from two reports citing Xbox marketing boss Aaron Greenberg during a recent interview.
As written here before, the Xbox Team wants as many games and consoles as possible to bolster its subscriptions. However, two reports have taken the opportunity to listen to the embarrassing Andrea Rene and her crew talk to Greenberg on a recent What’s Good Games episode.
These two websites happen to be gamespot.com (archive) and wccftech.com. Both the former and the latter outlets note that Greenberg acknowledges that Xbox Game Pass, which is one of the Xbox Team’s golden child subscriptions, isn’t pulling in big money right now.
Contrary to the short-term view of the subscription’s income, the websites cite Greenberg saying that hopefully, in the long run, Xbox Game Pass pays off.
You can read what Greenberg had to say when asked about how much Microsoft or the Xbox Team is making from Xbox Game Pass right here:
“We always laugh when we hear that. Please don’t worry about us. Microsoft is going to be alright. We’re gonna make it, I think we’re gonna be okay.
With Xbox Game Pass, Microsoft is focusing on over-delivering on value, even if it comes at the cost of profits in the short term. It’s a different mindset. If you do optimize for profit, you can either say ‘How we do get as much profit out of each customer?’ or, do you pivot that and say, ‘How do we add as much value to our fans?’ ‘How can we actually over-deliver on value?’ If you do that, you build fans for life.
When people feel like you’re over-delivering on value, they want to not only continue to use your service but they want to tell their friends about it. The most powerful marketing is word-of-mouth marketing. We can’t create as many advertisements, as many assets as we want, but if both of you go tell one of your closest friends, ‘You have to get Game Pass!’ that’s way more effective than any marketing I can do. For us, we just want to keep adding more and more value to Xbox Game Pass so you feel really good about that and you feel like you want to go tell your friends about it. And ultimately, we think long-term that’s the right thing for the business and will have long-term benefits for us. In the short-term, yeah, Xbox Game Pass is not a big profit play. But we think long-term it works out good for everybody.”
In other words, the Xbox Team is focusing on over-delivering “value” to customers even if it comes at a short-term price. Moreover, Greenberg notes that any marketing the team puts out will never be as strong as word of mouth — something that Xbox Game Pass is reportedly generating.
With that said, the team currently thinks that in the future, something like Xbox Game Pass will offer long-term benefits business-wise. Until then, you can expect Microsoft and crew to ship the Xbox Series X this holiday season.
