Jeff Grubb: Microsoft is pouring billions of dollars into the development of Xbox Game Pass — no one is thinking about profit now
At this stage of its development, the Xbox Game Pass subscription service is far from making a profit for Microsoft, but this is not expected of it. This information was shared with readers by an insider and VentureBeat journalist Jeff Grubb.
According to Grab, Xbox Game Pass is a strategically important platform and a long-term project for the corporation, for which it spares no money, allocating literally billions of dollars to purchase content and produce new games.
"The lack of profit is not a problem at all. This is normal [for subscription services] at this stage. Netflix, which has only recently started making quarterly profits, will spend 17 billion on content this year alone. Such companies are ready to turn a blind eye to the money issue for years," Grab wrote.
The journalist believes that in five years the subscription model will become a very serious force in the gaming industry. When this happens, Microsoft will enjoy the fruits of current investments, while others will only begin to take the first uncertain steps, without actually having a chance to take a dominant position.
"It makes sense now to invest tens of billions in a gaming service in order to rule on this field later, and not spend the same money later to become the next Paramount+," Grubb added.