Microsoft Exec: “Gaming Is a Massive Business;” Xbox Game Pass a “Real Win-Win” For Publishers & Gamers

Today Microsoft chief marketing officer and executive vice president of the Marketing and Consumer Business Chris Capossela talked about Xbox Game Pass at the Evercore ISI TMT Conference.

“I’m a huge gamer fan. I’m a huge gamer myself. And I just absolutely love how committed we are to this business. For those of you who aren’t really familiar with it, gaming is a massive business.

And it used to be the gaming world was sort of split between the PC gamers, who are diehard PC-only, and console gamers, who love their particular console, whether it’s Xbox, or Playstation, or Switch or the Wii, or what have you.

But what we’ve seen as the technology has gotten better and better, gamers actually game across many platforms.

They don’t just play on their console, or just play on their PC. So, we’ve really tried to change the business model of the way we approach gaming to put the gamer more at the center so that our promise is that hey, you can play the games that you love with the people that you love, because social is a big, big part of gaming, and the community is a big part of it across the devices that you love.

So with Game Pass, you basically pay a monthly fee for access to hundreds of games. You don’t have to buy the game if you don’t want to. You can just play that game, then you can play it on the console that was built for or the PC it was built for, but we’re also with our highest tier subscription, hosting console’s at our own data centers and streaming those games to a variety of endpoints, even an Android phone, and soon we’re going to be testing on the iPhone and the iPad through the browser, as well as of course, Windows PCs, so, you can think of it as game streaming to many, many endpoints, really billions of different endpoints. So it’s less console-centric or PC-centric. It’s far more gaming-centric, and the latest number we’ve announced is 18 million game pass subscribers worldwide.

We’ve only been at it for a relatively short period of time, so we’re thrilled with that growth. As you saw Kirk our Q3, our gaming revenue grew 50%, which is kind of crazy. Some of that’s driven by the new consoles, Xbox Series X and Series S, but a lot of it frankly is driven by subscriptions, and content and services on top of those subscriptions.

I’ll just share a couple of crazy stats: one of the things we’ve been blown away with is that I can look at someone before they’re a game pass subscriber and after they’re a game pass subscriber, and we’re finding that once somebody subscribes, they’re spending 20% more time playing games.

So they go even deeper into gaming. They’re playing 30% more genres, so they’re exploring just like a Netflix person might explore documentaries or comedy even if they were an action flick person. 30% more genres. And they’re playing 40% more games overall including games that are outside of the subscription. And so, for game developers, Game Pass is an awesome way for them to take their content and get it in front of gamers.

It’s not just the consumer wins and the publishers lose. This is a real win-win model and we’re pretty psyched about that.”

Capossela concluded mentioning again that gaming is a “huge business.”

Speaking of Xbox, we’re probably going to hear a lot more about future plans at the Xbox & Bethesda Games Showcase at E3 2021 on June 13.