A recent report has unveiled the staggering amount of money Microsoft reportedly allocates annually to entice third-party developers and publishers to bring their games to Xbox Game Pass. According to Bloomberg, Microsoft now spends $1 billion yearly to secure third-party games for the subscription service. The report states that Microsoft offers 'flat fees of millions of dollars upfront' to include titles from smaller publishers in Game Pass. GameSpot has reached out to Microsoft for further details on this matter. It is presumed that Microsoft would pay more for a developer to launch a new release on Game Pass compared to licensing an older title. In 2021, Microsoft Gaming CEO Phil Spencer openly discussed the varied nature of deals for Game Pass releases, stating that there is no single approach. He told The Verge that Microsoft's Game Pass deals are 'all over the place,' acknowledging that this might seem 'unmanaged.'
In some instances, Microsoft fully funds the development costs of a game, allowing the studio to sell the game on rival platforms like PlayStation and Steam, or at retail, while Microsoft benefits from having another Game Pass game. 'For them, they've protected themselves from any downside risk. The game is going to get made. Then they have all the retail upside, we have the opportunity for day and date. That would be a flat fee payment to a developer,' he explained. In other cases, a game might be completed, and Microsoft then negotiates a straightforward cash deal to bring it to Game Pass, according to Spencer. Other deals involve usage and the extent of monetization through in-game sales. If this all sounds chaotic, it's because it is.
Spencer has been candid in admitting that Microsoft doesn't have all the answers. '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,' he said. While Microsoft can offer substantial sums to smaller publishers to bring their titles to Game Pass, larger publishers often decline such offers or refuse to put their titles on Game Pass for various reasons. Strauss Zelnick, the CEO of Take-Two, which owns GTA and Red Dead, told Bloomberg that launching big games on Game Pass at the start doesn't make 'any sense at all.'
Zelnick has maintained this stance for a while. Take-Two has, however, included some of its older titles in Game Pass, such as Grand Theft Auto V and Red Dead Redemption II, though both have since been removed from the catalog. Recently, Zelnick commented on Microsoft's decision to include Call of Duty: Black Ops 6 on Game Pass at launch, stating it will boost Game Pass memberships, but only temporarily. Many have debated the economic viability of launching brand-new games on Game Pass, which is one reason why Sony doesn't introduce new PlayStation games into PlayStation Plus.
In other Game Pass news, a new Standard tier of the service has just been introduced, featuring some key differences from other versions. For more details, check out GameSpot's comprehensive breakdown of all the Game Pass tiers.
