If you’ve got an Xbox console or an account on PC, chances are you also have an Xbox Game Pass account. Microsoft’s all-you-can-game buffet is stupidly good value for money, a regularly rotating selection of games that aren’t just blasts from the pasts but also features newer releases arriving on launch day as well.
So how the heck do developers make money from Game Pass? Speaking to The Verge, Xboss Phil Spencer addressed that very question. “Our deals are, I’ll say, all over the place. That sounds unmanaged, but it’s really based on the developer’s need. One of the things that’s been cool to see is a developer, usually a smaller to mid-sized developer, might be starting a game and say, ‘Hey, we’re willing to put this in Game Pass on our launch day if you guys will give us X dollars now’,” Spencer said.
In certain cases, we’ll pay for the full production cost of the game. Then they get all the retail opportunity on top of Game Pass. They can go sell it on PlayStation, on Steam, and on Xbox, and on Switch. […] Sometimes the developer’s more done with the game and it’s more just a transaction of, ‘Hey, we’ll put it in Game Pass if you’ll pay us this amount of money.
Others want [agreements] more based on usage and monetization in whether it’s a store monetization that gets created through transactions, or usage. We’re open [to] experimenting with many different partners, because we don’t think we have it figured out. When we started, we had a model that was all based on usage. Most of the partners said, ‘Yeah, yeah, we understand that, but we don’t believe it, so just give us the money upfront.’
Basically, Microsoft is flexible and has cash to spare. Spencer added that the end goal is a hybrid model of investment and revenue share. The greatest achievement of the service according to Spencer though, is how Game Pass has helped fund games that ordinarily would never have made it past the stage of conception.
“The thing that’s been heartwarming to me, as somebody who’s been building games for so long, is to see games come to the service that wouldn’t have been built [without it],” Spencer added.
When the team, if they’re just out there pitching the publishers on a retail game, if it doesn’t fit into some Excel spreadsheet that tells you what the retail outcome will be, then it doesn’t get green-lit. You see this in things like Netflix. There are clearly shows on Netflix that would have never been greenlit by NBC or CBS, or ABC in the old model, and frankly, can have real success. And my hope is that Game Pass can get to that same level.
And there you go: Money talks, but Microsoft’s incredibly deep pockets clearly talk the loudest now that it has transformed over the years to value games more than ever. I’m still hoping for Scalebound to be resurrected though.
Last Updated: November 26, 2020