Microsoft spending over $1 billion annually on third-party Xbox Game Pass titles

Xbox boss Phil Spencer says Microsoft spends over $1 billion a year bringing third-party titles to Xbox Game Pass.

Spencer revealed the figure during an interview with Windows Central and stated that Xbox Game Pass is "financially viable, meaning it makes money," despite that outlay.

Elaborating on what Xbox Game Pass adds to Microsoft's repertoire, Spencer added that simply keeping players engaged on Xbox platforms represents a win for Microsoft.

"Because we have a platform, and we have a subscription service, having people play more and stay engaged on the platform, frankly, regardless of the types of games they're playing, is a very viable part of our strategy," he said.

"The diversity of business models allows us to invest in different kinds of content and still have financial success with that content. When we look at the back catalog of games from Bethesda, we get really excited. We look at the back catalog from Activision and Blizzard, we get really excited about the things we can do."

It's a reality that, for Spencer, will enable investments in "different kinds of games [and] different sizes of games," largely because there's an acknowledgement internally that not every Xbox Game Pass title has to be the sort of experience that "takes up all of your time."

"What we see in Game Pass is a service that supports all kinds of games, from the biggest games, to the unknown indie games that you didn't know you would love until you played it," he continued.

Xbox Game Pass on PlayStation and Nintendo platforms not currently part of Microsoft's plan

During the same interview, Spencer quashed the idea that Microsoft is actively pushing to bring Xbox Game Pass to rival platforms such as the Nintendo and PlayStation.

Those remarks come shortly after Xbox CFO Tim Stuart told Wells Fargo summit attendees the company wanted to bring its video game subscription service to "every screen that can play a game. That means smart TVs [and] mobile devices, that means what we would have thought of as competitors in the past like PlayStation and Nintendo."

Spencer seemed to indicate that Stuart was making more of a philosophical point about Microsoft's long-term ambitions for the Xbox platform and how customers might be onboarded into the ecosystem without needing to buy a console.

"We have no plans to bring Game Pass to PlayStation or Nintendo. It's not in our plans," said Spencer, adding that Microsoft will continue throwing its weight behind console hardware to repay existing customers. As for Xbox Game Pass, he suggested its purpose is twofold, letting Microsoft expand beyond the conventional confines of a hardware ecosystem while simultaneously providing value to Xbox owners.

"Game Pass was one of the things you know that over the last five years we built, and we continue to grow, it's on PC, it's on cloud. It's an important part of the Xbox console identity," he said. "And I think it will continue to be that. And we will continue to look at future ways for us to innovate across our game portfolio and our platform."

You can hear more from Spencer by checking out the full interview on Windows Central.