Satya believes spending money is competition. Making COD a GP exclusives is all this acquisition is about and they will absorb the costs.
Don't listen to microsoft's PR about what they will or wont do. Look at their submissions to the CMA. Gamepass is not being adopted at a rate that is sustainable and PS has more than double XBOX's total subscription. Do the math.
Gamepass is sustainable and profitable for Xbox.
Unlike netflix, gamepass is an integrated part of Xbox. This means, Xbox console is attractive, because of the service.
People who buy the console, due to gamepass would build library on xbox, meaning they would spend money on 3rd party games, which arent part of the service. This wouldnt happen without gamepass. That is what MS is looking for Xbox.
If we view gamepass as standalone only, without Xbox, it is sustainable, as it doesnt burn alot of money. Any money spent on aquisition wont affect gamepass money, because that is an asset for MS.
Lets say you buy a nintendo switch, and 10 switch 1st party games for around $1000. You are not losing $1k. You are gaing asset, which you can sell it later. And since Nintendo games dont depreciate quickly, they are worth the same money, when you sell it. You would be able to get that $1k after 1 year. That is if the device doesnt depreciate that much.
That is the same thing for MS purchases. They arent losing money on their aquision. They are gaining asset, which they can sell it later in the furture, if they desire to gain back their money. In the mean time, those assets would help their services, not just gamepass, but Xbox also.
As such, gamepass isnt shouldering that money. The only thing gamepass is shouldering is 3rd party deals, Xcloud rent money, Royalties for 3rd party. The rest would be directed to Xbox division, since gamepass uses Xbox and windows store.
Gamepass is on growth mode. That 3b revenue, is being put on gamepass to get more games. The more sub the service get, the more revenue it makes, the more that money goes to gamepass in order to get more games.
We can see that flow from their day1 3rd party games, which suggests gamepass growth. The actual profit would come from 40+m userbase. until then, any money that is made would go to gamepass.