Report: Minecraft profits used to fund Xbox games portfolio

Q: How has Microsoft accounted for Minecraft’s Game Pass usage when allocating profits to fund other Xbox studios?

Microsoft uses an in-house accounting approach within the Xbox segment that weights a game’s value on Game Pass to quantify its contribution, effectively measuring imbalanced weight by factors like how many people are expected to play a title in a given month. That weighted valuation lets Microsoft reallocate Minecraft’s substantial profits to help fund other Xbox studios, though the article says the exact methodologies and whether this was a planned policy or a reactive funding choice remain unclear.

Q: Did Bloomberg’s report indicate whether the reallocation of Minecraft profits was a formal policy or an ad-hoc decision?

Bloomberg’s report did not make clear whether the reallocation of Minecraft profits was a formal, planned policy or an ad-hoc decision by Microsoft. The article states it is unclear if this use of profits is a planned occurrence or something done to help fund the catalog.

Q: What internal Xbox accounting practices mentioned in the article influence how profitable titles are valued for catalog funding?

Xbox values titles on its Game Pass-weighted accounting system that uses specific in-house measures to quantify a game"s value on the service, meaning certain games carry much more weight than others. The company looks at metrics such as how many people are expected to play a game in a given month and may re-allocate profits across studios to prepare catalog funding. These practices are part of an internal, in-house Xbox accounting structure for the games division.

New reports say that Microsoft used profits from bestseller Minecraft to help fund the development of other games in the Xbox games software lineup.

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Derek Strickland

Senior Gaming Editor

Published Jul 9, 2026 9:39 PM CDT

2 minutes & 45 seconds read time

TL;DR: Bloomberg reports Microsoft funneled profits from Minecraft into funding other Xbox games, with Minecraft cited as a top-earning, highly profitable title and a major Game Pass driver; the practice may reflect Xbox's subscription-weighted accounting, catalog planning, and potential reallocation of studio profits amid cannibalization effects.

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New reports from Bloomberg say that Minecraft's profits helped fund other games in the Xbox software portfolio, indicating that proceeds from highly-profitable titles like Minecraft helped create other titles for Game Pass.

Report: Minecraft profits used to fund Xbox games portfolio 2

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A recent Bloomberg article has caused a bit of a stir for Microsoft; the coverage says that profits from Minecraft were used to fund other games at Xbox. There's a lot to unpack here, especially since Minecraft is a huge driver for the Xbox business. In fact, when it comes down to it, Minecraft and Call of Duty are the most valuable properties insofar as sales and engagement--Minecraft is the second best-selling game of all time with 300 million copies sold.

It was also revealed that Minecraft was the highest-earning Xbox game pre-ABK, and that it makes significant profits. "Minecraft is one of the most profitable, if not the most profitable first-party game," Xbox CFO Tim Stuart said during the FTC v Microsoft trial of 2023.

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Given the way Microsoft's games business works, it may not be unusual for this kind of effect to happen. Xbox is weighted to a subscription service that uses specific accounting measures to help quantify the value of a game as it exists on the service. We don't know these exact methodologies, but bear in mind that certain games carry much more weight than others. Something like Minecraft will do heavy lifting on Game Pass, which is geared towards better profitability by default (if certain conditions are met).

By virtue of the service itself, which seems to have games essentially competing with one another in certain ways, there is assuredly some measure to account for this imbalanced weight; eg, how many people are expected to play Minecraft this month versus, say, Call of Duty.

What's unclear about the report is if this use of Minecraft's profits is a planned occurrence, or if it's something Microsoft felt it needed to do to help fund the catalog.

Preparing content for a catalog is different than preparing as a sellable product, precisely because of the phasing; releases of anticipated sellable products tend to peak at the early launch points and peter out over time, and then are typically picked up on the downturn by streaming services, which add some new spark of life to the content. But when the content is made available simultaneously on both avenues, the skew may give more weight to the convenient option.

This has been identified as "cannibalization" in Xbox's business, but it's more of a process of conversion. For example, Microsoft made $300 million less in Call of Duty sales on Xbox and PC with the release of Black Ops 6, which launched into Game Pass simultaneously and saw the largest-ever spike of day one sign-ups for the service.

Preparing for this effect may not be easy to do, and may require some sort of re-allocation of profits across studios.

Frequently Asked Questions

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Question #1

How has Microsoft accounted for Minecraft’s Game Pass usage when allocating profits to fund other Xbox studios?

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Question #2

Did Bloomberg’s report indicate whether the reallocation of Minecraft profits was a formal policy or an ad-hoc decision?

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Question #3

How did simultaneous Game Pass launches (like Call of Duty: Black Ops 6) affect standalone sales revenue according to the report?

The report says simultaneous Game Pass launches cannibalized standalone sales, costing about $300 million in Call of Duty sales on Xbox and PC when Black Ops 6 launched into Game Pass. This coincided with the largest-ever spike in day one Game Pass sign-ups.

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Question #4

What internal Xbox accounting practices mentioned in the article influence how profitable titles are valued for catalog funding?

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It all really comes down to how the Xbox division does its books, and from what we've seen from the FTC data, the group uses a kind of in-house structure for the Xbox segment.