Black hole sucks in money: Microsoft pays $1 billion a year for Xbox Game Pass games

According to sources, Microsoft is investing $1 billion to ensure that third-party games are included in Xbox Game Pass. Among the many renowned brands with multimillion-dollar contracts are several well-known names.

As reported by Bloomberg in an extensive article about Xbox and the leaders of the company's gaming division, Microsoft offers smaller studios a fixed multimillion-dollar upfront fee to include their titles in the subscription, as well as a share of the subscription revenue and access to a larger market.

The company relies heavily on Game Pass, especially given the current circumstances. With declining Xbox console sales and unsuccessful game launches, Game Pass has become Microsoft's primary "weapon."

Microsoft is also collaborating with several major publishers to add their games to the subscription. These include Ubisoft, EA, and Rockstar with the GTA franchise. However, despite these efforts and significant expenditures, growth is slowing down. Stagnation is expected even with upcoming titles like Call of Duty: Black Ops 6, Indiana Jones, and S.T.A.L.K.E.R. 2.

Among the interesting facts shared by Bloomberg is the demographic breakdown of gamers in the United States. According to the publication, half of the gamers in the U.S. are women. Additionally, despite a significant presence of African American and Latino communities, 75% of gamers are white. This year, Microsoft has already cut more than 2,650 jobs in the gaming sector, with a quarter of those layoffs announced in mid-September. Sources indicate that its gaming division is operating under strict profit constraints.