Microsoft’s decision to bring Call of Duty to Xbox Game Pass may have come at a steep cost. According to a new Bloomberg report, the company forfeited more than $300 million in Xbox and PC sales last year after including the blockbuster franchise in its subscription service. The figures come from internal estimates shared by a former employee who spoke on condition of anonymity.
Eight years after launch, Xbox Game Pass remains central to Microsoft’s gaming strategy, but concerns over profitability continue to surface. The service’s subscription-based model provides players access to hundreds of games for a flat monthly fee. However, current and former employees told Bloomberg that while the platform attracts players, it also undercuts traditional sales of premium titles that once commanded $60 to $70 each, along with further revenue from expansions and in-game purchases.
“Game Pass hasn’t delivered the explosive growth Microsoft anticipated post-Activision, and they’ve realized their infrastructure costs don’t align with their pricing model,” said Joost Van Dreunen, founder of the video-game analytics firm Aldora. Xbox declined to comment when asked about the report.
The move has not been without internal controversy. Some employees expressed concerns about whether placing expensive, high-budget games on a subscription service makes financial sense over the long term. Former executives from across the industry have voiced similar doubts about the sustainability of the model.
Pete Hines, a former Bethesda executive, shared his reservations, stating, “I saw what I considered to be some short sighted decision making several years ago, and it seems to be bearing out the way I said. Subscriptions have become the new four letter word, right? You can’t buy a product anymore.” He warned that developers risk being undervalued, adding, “If you don’t figure out how to balance the needs of the service and the people running the service with the people who are providing the content – without which your subscription is worth jack shit – then you have a real problem.”
Former PlayStation America president Shawn Layden also addressed the issue, cautioning that the debate should not solely focus on platform revenue. “The question is not, ‘is the service profitable for the platform’. Is it healthy and helpful for the developer is what we need to ask,” Layden remarked in a LinkedIn post.
Despite these criticisms, Microsoft has maintained that Game Pass is profitable. The service generated nearly $5 billion in revenue for the fiscal year ending in June, marking a record for the platform. More recently, Xbox introduced three new pricing tiers on October 1, giving subscribers the option to pay $10 for a limited catalog, $15 for a larger collection of 200 games, or $30 for access to more than 400 titles, including 75 day-one releases. Upcoming launches such as Call of Duty: Black Ops 7 and The Outer Worlds 2 are included in the highest tier, reflecting Microsoft’s commitment to positioning Game Pass as the centerpiece of its gaming ecosystem.
While Xbox continues to tout the subscription model’s benefits, the debate over its sustainability appears far from settled. Developers and former industry leaders remain cautious, highlighting a growing divide between the interests of platforms and those of the creators whose games make the service viable.
