Developers believe Xbox Game Pass is 'fair,' still needs to take popularity into account

Xbox Game Pass logo
Xbox Game Pass logo (Image credit: Microsoft)

Xbox Game Pass

Xbox Game Pass (Image credit: Microsoft)

What you need to know

  • Xbox Game Pass Ultimate was previously only available to Xbox Insiders.
  • Now, anyone can get the bundled subscription for $15 a month.
  • Developers think Xbox Game Pass is fair, but some believe it could be better.
  • You can purchase Xbox Game Pass Ultimate through the Microsoft Store (opens in new tab).

Xbox Game Pass is a monthly subscription service on Xbox One and PC which offers over two hundred games for $10 a month. Just like Netflix, certain titles rotate in and out, but Microsoft exclusives remain there forever. Now that Xbox Game Pass has been available for many months, developers have had a chance to determine if their games should go up on the service. While there are some complaints, it seems like studios are quite happy with Microsoft's effort to create a Netflix for games.

Recently, Eurogamer compiled a selection of opinions from acclaimed developers. While smaller developers like Playdead said that Xbox Game Pass was fair, publishers like Paradox Interactive expressed concerns over the number of hours played.

Dino Patti, the cofounder of Playdead, said the following. The quote has been edited for clarity.

Consumers want as many games as possible, as free as possible, and you can't get anything for free, so you need to find the right price, but that's the angle. Developers need to look at what does this get me, and for me, and I might be biased, but I think the way business is for Xbox Game Pass, it's the first time it's actually what I would consider fair for developers... I've been suggested subscriptions that never worked out because they don't know what developers need, and in the end, it is developers putting out a game for free... with Xbox Game Pass, they're doing it correctly for the developers.

Patti thinks that Xbox Game Pass is fair. It's good to know that it's working out for smaller developers. Paradox's former head Fred Wester discussed how it could be improved, though. He said the following.

Now at Paradox, we loved that business model, because people play our games for three or four thousand hours. While the Xbox Game Pass model to us is still a decent model, we think we're not getting paid enough, because people play our games more than they play very single-player driven narratives.

It seems that Webster wants additional compensation if someone plays his company's games for longer. Hopefully, Microsoft will find a way to take this into account going forward.

You can currently purchase Xbox Game Pass Ultimate for $15 a month. The subscription includes Xbox Game Pass, Xbox Game Pass for PC, and Xbox Live Gold.

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Asher Madan handles gaming news for Windows Central. Before joining Windows Central in 2017, Asher worked for a number of different gaming outlets. He has a background in medical science and is passionate about all forms of entertainment, cooking, and antiquing.

30 Comments
  • Makes no sense though. Both games at retail likely released for the same £50 price. A game doesn't cost £150 because it has 1000 hours does it? Seems like a sneaky way for Paradox to get more money.
  • I can see both sides, maybe not from the hours played argument, but popularity can be a fair incentive if the game is getting many launches per day. Of course, length of time on the service could be that incentive.
  • Same, can see both side of the coin however the moment Microsoft goes down that route they risk alienating the smaller studios and indie devs. Plus these smaller and indies devs need a constant revenue stream to grow. Although the same can be said about larger studios the key difference is that unlike the larger studios they do not have an established revenue stream to at least cover overheads whereas the larger studios can do so. As well as obtain investor or publishing funds due to brand recognition and a established player base. So at the current state of play it's fairly balanced towards all parties because I doubt any gamer wants a price increase just so larger studios can take more money and leave the smaller + indie devs with a smaller cut.
  • But Paradox aren't saying we would like a bit more because we are a bigger studio. They are saying maybe we could get more because our game takes 1000 hours to complete. By that metric, why don't they sell at retail for £100 more than games like God Of War, Halo 5, Uncharted 4, Gears 4. Because these games can all be finished in under 20 hours. Unless they choose to sell at retail considerably more than everyone else because they take more hours to complete. I fail to see why they should get more money than others based on the same metric for Gamepass.
  • @Richard Loveride. I wasn't referring to Paradox students, I was speaking generally and if I was referring to Paradox studios I would have mentioned them lol. Anyway, Paradox stated " because play our games for three or four thousand hours. While the Xbox Game Pass model to us is still a decent model, we think we're not getting paid enough, because people play our games more than they play very single-player driven narratives.", That sounds like it's not a single player narrative that takes 1000 hours to complete lol... Any game that takes 1000 hours to complete has a pretty major big incentive on replay value and will most likely hold prices for physical copies for a long while. Unless of course the game play is utterly outrageous and that 1000 is effectively spent ferrying back and forth on fetch A to B quests / missions.
  • Yeah but my point was do they sell their game at retail for $100 more than all other games? Just because it has more hours to play? If they don't to it to retailers. I don't see why MS should fork out for it in Gamepass.
  • Hours of game play simply is not a good metric. I mentioned in another comment that I play Pokemon Go for hours, probably more than any other video game. If someone said they were going to change it to a one-time cost game, there's simply no way I'd purchase it for more than 99 cents. Its not simply # of hours. It's the level of quality of those hours. Moreover, its also the experience type of those hours. Yeah, building a city can take a lot longer and if you're creative enough, you can find new ways to enjoy yourself. FPS can be enjoyed with different groups as just a way to have fun together without having to think too much about it. Single player narratives take a lot of work for what they provide. It can take just as much effort, skill, talent, and resources to deliver that. Movies offer fewer hours than TV shows and very often cost *a lot more* to make. # of hours alone is simply a horrendous choice for a metric. Gamers would absolutely lose out if that was the way forward. So many quality games would be at an immediate disadvantage to games that appeal to certain individuals who will play a certain game for hours a day for months or years even. The statistics will get extremely skewed. And the only way to give more money to those developers is to take money away from other developers who simply offer a different experience. And they both cost money and there's no reason to assume one has more value than the other. I don't want Game Pass to fill with MOBAs and MMOs and FPS battles, etc. and other games that reward endless playing. They have their place, but once you reward that over anything else, developers will follow the money. Single player narratives will fall off of Game Pass and be left with endless playing games (aside from first party titles).
  • While normally this would be the case, we are talking a subscription service here. By providing a game that provides countless hundreds of hours this will equate to significantly more revenue for Microsoft as a direct result compared to someone offering up a game that can be completed in a weekend. One could argue that technically in physical rental stores it is the same scenario, the rental store receives the bulk of the revenue. But we are talking digital and considering any publisher could choose to cut out the middle man and provide their own service, it makes it more enticing for a distributor to try to appease their clients.
  • Does it equate to more revenue for Microsoft though? It'd simply be number of players who want a game, not how long they're playing it for. It's simply if people find the games they want that entice them to sign up for the service. Hellblade was the first game that made me consider Game Pass.
  • Yes, Most definitely. If a person plays a game on Game Pass for six months, they have made more money for Microsoft than someone that played a game for a week.
  • It needs to he fair for developers, perhaps based on gameplay times (cumulative) and exclusivity etc. Fame pass and ultimate has changed gaming forever, it's a great service but without decent remuneration for developers it will not last. I'd like to see all MS exclusives on their now, Forza etc from back catalogue.
  • There are four parties at stake here, large studios, small + Indie devs, gamers and Microsoft. At present gamers are effectively the sole revenue source as any business venture that relies on funds from the business is a loss leader and is not a profitable business model. So to ensure that all studios get a fair deal, everyone gets equal remuneration regardless of hours played. Because if you as a indie dev work your rear end off and make a game but get no return on investment just because your game is not played as much as a game from a large studio what would be the point in continue development on that game? There are two ways that levels of remuneration can increase
    1) At a certain point almost all the cost of infrastructure costs will have paid for itself bar the maintenance costs (utility costs etc). Therefore Microsoft's overhead will increase and that saving should used to increase remuneration levels as this is the fairest way for all developers and gamers. By doing so it shows a greater level of empathy towards gamers and commitment towards all developers plus it's a major PR win - thus increasing mindshare and player base. Thus with increased levels of the subscriptions, there is greater profit to be head. At a certain point infrastructure will need to be upgraded to meet increased demands on the service however as Microsoft has the infrastructure upgrades in place due to their Azure business this really is not a sticking point for Microsoft - it would be for any other company solely doing game streaming as they would not have the diverse portfolio or the offshore cash to offset losses. 2) A price increase in the subscription BUT that will completely price it out the reach of many people and thus artificially limiting the player pool and thus reducing user engagement with the service. As you already need a xbox live sub and a game pass sub which can equated to $20 a month. Any higher it's too expensive and price prohibitive. Therefore this option is a massive no go and would be the wrong move on all levels.
  • What I would love to know is how much money companies makes from this. What's the business model? From what the Paradox guy is saying it looks like they get a fix amount of money per month on the service.
    I wonder if a game launching straight on game pass is actually making more money than if it wasn't on game pass. Ok there may be more people trying or playing it but there will probably be a lot less sales.
    Maybe this will encourage other ways of making money. Maybe it'll encourage making games with microtransations...
    I sure hope that's not going to be the case. Also like the Paradox guy said. This may encourage game companies making short games just so they can be in the service. Also like I've been saying for years. I'm not sure game pass encourage quality but quantity. For me it's no longer about making high rated games and focus on sales but it's about finishing a game quickly so that it's in the service.
  • I would like to know as well. I imagine it is a fixed rate, but I would also imagine it's based on the number of subscribers to the service. By the "fair" statemt, it sounds like it could be around the same as actual sales numbers would get them (not equal to games like RDR2 of course). Maybe in the long run sales could win, but that could be a gamble versus set revenue for several months. You are correct in stating this down side to services. The only thing that could prevent this type of thing would be to offer incentives for well made and quality games, but this could lead to pushing out smaller devs as discussed in the above comments.
  • My interpretation of the "fair" statement is more something like they know in advance. Say "you get $X if you are in the service for 3 months", or "you get $Y per download of games". But you'll really need to the entire Eurogamer article. Asher Madan tried to suggest in this article that devs find it "fair" by putting the title "Developers believe Xbox Game Pass is 'fair' [...]", but only one dev actually used the word "fair". Others where a lot more cautious. There was an interesting part of the article that says that devs themselves aren't given access to proper consumption metrics, and that's quite interesting. How could you actually negotiate or even know how profitable it is for you as a studio if you're not given all information and possibly only fed marketing numbers?
    "developers who sign with subscription services may not have access to (in themselves questionably defined) consumption metrics, whch means they have less clout in negotiations with platform holders and publishers. Middlemen, in other words, may benefit from a subscription-driven industry more than creators"
    https://www.eurogamer.net/articles/2019-07-05-xbox-game-pass-developers#... I don't think the money made through renting games could be even close to what a studio will make from sales, at least when it comes to AAA games. That's why I don't see them coming to renting service at launch. For smaller games exposure is very important so it might help. And yes, possibly this could give them a guaranteed revenue that could be very important to cover development costs. There is another thing we got to consider here. There is another party here that people tend to forget and that's the retailers.
    This has a massive impact on retailers and some have already talked about stop selling XB and its product in their store. An Austrian retailer already announced it.
    This also takes a clear shot at the used games market and again retailers aren't too happy about it. ofc all this also a step towards an all-digital future.
    Here is an article talking about this:
    https://www.gamesindustry.biz/articles/2018-01-29-for-the-consumer-xbox-... There has been loads of offers and deals to try to get people to use game pass. MS has hardly communicated an actual number of subscribers, but by pushing these deals the number could be real big and they might not hesitate to communicate them soon to try to show that it is popular.
    I think right now MS is losing a lot of money though all these $1 offers because you can't possibly think that the $1 helps in covering all deals with third party along with costs associated with all the MS studios.
    MS really depend on the masses. A major flaw here is that besides the MS major games there won't be too many major games that launches on game pass so people will still need to pay the $60 for their 3rd party games (that represents a large percentage of the games average players play).
    Will people actually keep paying $15 per month once the $1 offer expires, knowing that they'll still to buy games from non-MS studios?
    If MS talks about the number of subscribers, devs might ask for more money, meaning the whole system could struggle to be profitable. MS is investing massively here because they know they could be making huge amount of cash if they have full control and monopoly but it's a lot of risk. We'll see what happens.
  • Fun fact, in Australia EB Games boycotted the PSP Go for that very reason, they would not get a cut of game sales for that console (which is where they would generally make money). Granted that was in a very different time and digital was far less prevalent than it is now. The interesting thing is, PC games have been digital only for a ridiculously long time now (older than the current console generation) and they still manage to survive in the wild. You can just as easily stick a download code in a Bluray case as you can a physical disc.
  • I agree with retailers doing that. It's business. If a product doesn't make you money they might as well replace it with a product that may sell more.
  • You basically included contradictory information. You stated major games would still sell individual copies first and not be on Game Pass. That's where retailers come in. And retailers are a party, but they aren't a stakeholder and they don't need to be 'remembered' or worried about. They offer a service that's becoming increasingly irrelevant. If they can't find a way to make themselves relevant, than that's business. Boycotting won't help them. People won't stop buying Xboxes because they can do everything they need to without retailers (which is stretching the reality to begin with... Game Pass is not big enough to displace individual games sales just yet).
  • That's kind of an asinine reaction to stop selling products because of a subscription service. Are they doing to do the same for EA games that have had their own service before MS? How about Ubisoft when they do theirs? What about PS with their older game catalog on their service? I think you are probably right in the pricing, I was thinking more of the music streaming model where they pay per subscriber or region. I think this is more of a set contract number like you said, although they could easliy track usage. The problem is, this is all speculation. Regarding trying to compare AAA games to other games launching in the service, I don't believe that's a fair comparison or even relevant to a sales vs service discussion. Publishers have way more invested in a AAA title so of course they need sales to cover it. They also are right to believe that there will be more sales initially on release than a year or so later. This is why I can see these games releasing on the service after the publisher sees the initial sales period end, Metro is a great example of this to me. Most people have bought the game already that were going to at the release price. The rest are waiting on sales or used prices to fall, which may equal the same revenue of these reduced prices sales. They also get nothing of used games sales, so if they avoid some of this, at least it's something.
  • But the argument can be understood. Retailers makes very little of console sales and even game sales. Some make more from used games market. But if they want to kill it and that MS provide their games on game pass it doesn't make sense to use store place to stock XB1 and XB products. The retailer said they are losing money by selling XB products and that's not a good thing. If you read the article you can see the reactions of other retailers some UK retailers...
    I think their a EA game like FIFA will take a lot less space than XB1 consoles. Also EA is not putting their latest games on EA access so it's not really direct competition. Same with PS. ofc if Sony does it and they lose money selling PS products they might do the same. Yes, sadly it's all speculation. MS wants to hide the business model and numbers not only to us but from the article they also don't show the consumption numbers to devs. I don't really understand the reason for that. I know it's business and it's a question of image, but I think it's weird that they don't share the information with developers. I find it really fishy and it makes me wonder if the whole thing is really "fair". I brought AAA because we are talking about the business model. It's unlikely to see a major AAA game getting released on game pass. But what that means is that the $15/month is not enough for most gamers. Popular games like a FIFA, COD or a RDR2 are unlikely to join the service and most others won't join in after 4-5 months of release. If a game is selling well enough or is popular enough it's not in their interest to get the game on game pass. I wonder if most gamers will see $15/month to rent mostly arcade games, the odd older AAA games and the few MS games as a good enough investment in the long run when you consider that they would still need to buy most of the popular AAA games.
    I mean we don't know. We'll see. There are a lot of deals with game pass but it's been going on for few years now. Yes, they are trying to get more and more people in, but will these deals go on forever? Sooner or later they'll probably want people to pay full price for their service.
    Also the used market is great. It regulate price of games. It's great for consumers and it also benefits gaming studios as well because I think most of the money is going back into gaming. When I was writing my first reply I was thinking, you know what would be really fair for devs? Just have a rent button in the store page. Just like how you can buy a digital movie you can also rent a movie for 24 or 48 hours at a fraction of the cost to buy it. Why not apply the same logic in gaming? Let people rent the game directly and devs get paid directly.
    It's more fair to gamers and more fair to devs...
  • The rental button could be a great addition. This seems to work great with movies. I think you are missing the point of giving subscriptions away, this is a common ploy by many industries to get you on a recurring payment that you may choose not to, or forget to, cancel before the real price comes. It costs essentially nothing for them to give you this 'free trial'. This is the same thing they did with Gold all the time. They even do it with O365. I think they did take a bigger hit on this current offer where it stacks your gold time though, this was more dilberate. I wholeheartedly agree that used games are good for certain retailers, though I think here it does nothing to regulate game prices as we have discussed before. I see the greatest example of that here with Gamestop. They have been raping the average customer on trade Ins and unfair prices for used games for decades. I understand not selling something because it's not making money so long as this is the reason it makes sense and not just a knee-jerk retaliation to Microsoft. I guess I need to find some time to read the article before I can comment further.
  • I agree that they had to take a pretty big hit by upgrading users' currently stacked gold into Ultimate for that $1. I had 2.5 years of gold stacked so I essentially got 2.5 years of gamepass for $1. Killer deal! I told all my gaming friends about it and most took advantage of it. I honestly couldn't believe MS was doing this and argued with the person that originally told me they were.
  • I wouldn't call it raping average customers. It's demand and offer. These are their prices.
    I could argue that the common ploy by companies to try to make money from consumers forgetting to cancel their subscription worse than the price used by retailers on used games.
  • You obviously haven't seen the prices I am referring to when I say raping. It's not a supply and demand thing at all, it's giving a bare minimum to customers trading in and keeping the price the highest possible to match new prices. You may call this the free market, but I call this taking advantage of people who don't know any better. The best example I have seen is where I was given around 8 dollars for a game they were reselling for over 35. This is also why I say here the used market (which is pretty much just GS here) does nothing to regulate new game prices in the US. If you have seen these practicies in action, or even fell victim once like me, you would probably want to boycott the company since you claim to be defender of all gaming. 😜 I think now you are mssing the point of my response regarding subscriptions. I wasn't arguing for it, I was stating why they can 'afford' to do this and it doesn't really cost anything for them. I'm not saying that it's a fair or moral practice at all, it's just the way it is. Is it unfair that credit card companies offer a service that makes them no money ( in fact costs them some) when they offer 0% interest offers in the hopes that you default or go over the time and can hit you with the full incurred interest? Probably, but that doesn't make them less prevelant. One can even argue that's a fair free market practice. Here's another example that thankfully you don't have to deal with (probably), but we do because we are "number one!" in everything including health care. We have private for profit health insurance companies that set medical prices and make them astronomical for anyone with out it. On top of practically requiring them to live, we also pay money to them eah month even if we don't use their services, and when we do we have to pay a portion of the sky high rates that they set in the first place. Finally, they can just choose not to cover something if they want to, especially if you are unhealthy or poor and have little options for coverage. We passed laws that try to prevent them from just dropping you or not coving you completely, but people call THESE unfair. Where is the morality? When I think about these kinds of things, it makes me care little about a free trial ending and someone getting charged for a service they don't really use. They should keep on top of their expenses.
  • GameStop was doing that not only because they saw an opportunity to take advantage, but because its first way they saw to save their business. Video games have very little profit margin (their costs are dictated by the distributors, not the resellers). Same with consoles. That's why the prices are always so ridiculously close to the same and only big box stores tend to have slightly lower costs cause they can take a hit and hope you buy something else in their store. That's why GameStop dedicates more space to used games and even more space to simply not-video game items (toys, etc.). Its still their fault for passing on the hurt to customers instead of finding some other way to absorb costs, but it is what it is. Still evil? Maybe. But a lot smaller scale evil and somewhat relatable.
  • Did it to save their business? This was over 10 years ago when they were swallowing up the other game retailers. They did it because they could. We, as customers, did it because we didn't know any better. I guess I used the wrong word because the F'ing people are got and are getting is completely consensual and not forced. I could argue that they are actually a little better now with their prices, rewards program and generous return policy, though I still buy used on eBay or Swappa.
  • I actually know what you're talking about. I guess these kind of gaming retailers are everywhere. I rarely buy games there but I do go when there are some good deals. You've said I may call this the free market and yes I will. Because they aren't really in a monopoly. I'm not too familiar with the health insurance companies and how they have a bit of a monopoly so I can't really comment on that, but I must say what gaming retailers do with used games is a lot more fair than so many other thing that goes on in gaming that doesn't get as much hate by people in general. I understand that you don't support the strategy by companies to try to get money from gamers forgetting to cancel their subscription, but my point is that it's far worse in the sense that while gamestop will show the price straight away, companies with subscriptions are relying on consumer forgetting and are willing to take money for a product the consumer doesn't really want or need. In a way, it's great because it's way more transparent. You know how much they pay for a game. You know how much they ask for a game. You can calculate the profit they can make. You don't need to be a hardcore gamer to see this. No one is forcing people to buy or sell games to these retailers. You don't need to be a hardcore gamer to use other ways to sell games. Something like PS+ or gold is forced on customers to play online games. We all know how much these companies ask us but we have ZERO idea how much it cost them and the profit they make.
    If anything I think MS and Sony makes a LOT more profit from gamers than these retailers. But since it's invisible to consumers it tends to get a lot