Microsoft's Xbox Game Pass platform has been the source of industry controversy for some time, and in the wake of Microsoft's recent FY24 Q4 layoffs, it's under more intense scrutiny than ever.
Xbox Game Pass offers hundreds of games for "free" as part of a subscription service. Prices range from $10 a month to $20 a month for different tiers, offering day one access to heavy hitters like Call of Duty and Xbox Cloud Gaming systems on the higher end.
Last week, Microsoft laid off 9,000 staffers from across its business, with many hundreds of those cuts landing on the Xbox gaming division. It's thought that the layoffs coincided with Microsoft efforts to splurge billions on AI investments, although some have also pointed the finger at the Xbox gaming business itself.
Xbox Game Pass is thought by some to be hurting Microsoft's gaming business, and potentially the wider industry, as the subscription cannibalizes retail sales. Our sources have suggested to us that Microsoft does charge back retail sales cannibalization to Xbox Game Pass' profits, but that hasn't stopped figures debating its long-term viability, or its potential impacts on the wider gaming industry.
With laid off Microsoft employees updating their resumes, Timur222 on X noticed that a Microsoft former Senior Business Manager had offered some insights into just how much Microsoft is paying out for Xbox Game Pass content deals, and the numbers are quite eye-watering.
Shared by former business manager Iain MacIntyre on LinkedIn, MacIntyre notes he negotiated hundreds of deals for Xbox Game Pass, ranging even above $50 million dollars. The figure likely applies to big heavy hitters in the service, including activations with Riot's League of Legends and Valorant, and perhaps Epic Games' Fortnite.
Microsoft's Xbox Game Pass has had a stunning year in 2025 frankly, with the spring content set featuring multiple game of the year contenders with Blue Prince, Expedition 33, DOOM: The Dark Ages, and the popular Oblivion Remaster. Recently, Microsoft landed titles like FBC: Firebreak, The Alters, and Space Marine's remake, as well as viral football hit Rematch.
The quality has been so good, fans and industry figures alike have been questioning whether or not it's actually sustainable, or even healthy, for Microsoft's gaming business.
The last time Microsoft shared total Xbox Game Pass subscribers, the figure was at 34 million, well over a year ago. Even a conservative estimate would put revenues at around $340 million per month that Microsoft has to play with for content, but the real figure is likely far, far higher. Microsoft has previously said that most subscribers are on the $20 per month tier, and Xbox Game Pass has also likely grown in subscribers since February 2024 when the last milestone was shared. PC Game Pass has been growing steadily as well, and Xbox Cloud Gaming, a corner stone of Xbox Game Pass Ultimate, has even overtaken console play in some territories for users.
Xbox Game Pass has been praised by smaller and newer studios looking to offset early risk in their businesses. But, others have warned that moving games to a "rentable" status could have a chilling effect on perceived value. Circana Analytics has recently reiterated that free-to-play forever games remain a challenge for industry variety, as players opt into Fortnite and Roblox ad infinitum instead of paying for new titles.
According to Circana, game subscription spending hit an all-time high in May 2025, with Xbox Game Pass and PlayStation Plus likely being the big winners.
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