For gamers, Xbox Game Pass is undoubtedly an interesting service from a value for money perspective. But how do editors and developers find their way financially? How does Microsoft get the presence of third party games on its service? These are questions Phil Spencer recently answered.
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We have told you several times about Phil Spencer’s on-site river maintenance contract The edge. Unsurprisingly, Xbox Game Pass was on the menu of that discussion with the great Xbox boss. The service, which is at the heart of Microsoft’s video game strategy, obviously allows its subscribers to play first-party games from American studios, but also to try out many third-party and studio games.
Knowing that the economic model behind Xbox Game Pass is completely different from the one they used to make their money on, one might wonder how Microsoft pays them to keep their games featured in its service’s catalog. . During this interview, Phil Spencer gave a number of explanations on the subject:
I would say our contracts are everywhere. Made the impression that things are not being monitored, but that the arrangements are really tailored to the needs of the developers. One of the really cool situations is when a developer, usually small to medium sized, starts working on a game and comes up to us and says, “h, we are ready to put our game in Game Pass when it is released, if you give us so much. ” Dollars now. “We have the opportunity to give them a guarantee of the commercial success of their game. They know that they will receive at least a fixed sum.
In other cases, we can fund the game’s entire production cost. In this case, they will receive the fruits of all sales that they make in parallel to the presence of the game on the Game Pass. You can sell your game on PlayStation, Steam, Xbox, and Switch. You thus protect yourself against possible commercial risks. The game is produced no matter what. You will receive all profits from the sale of the game and we will have the option to offer the game on Game Pass on the day of its release.
Sometimes the developer is done with the commercial exploitation of their game and the transaction is just “h, we agree to put our game in Game Pass if you pay us this amount”.
Others want agreements regarding the use of games and changes to them, be it editing generated through transactions in a store or through the use of the game. We are open to the idea of experimenting with many different partners because we don’t believe we have already found the right solution.
When we launched Xbox Game Pass, we had a completely usage-based model (of games). But most of our partners told us, “Yeah, yeah, we got it right, but we don’t believe it. Now just give us the money.
Unfortunately for the curious, Phil Spencer does not give examples of games that match the various scenarios. Either way, it’s interesting to note that third-party games released on PlayStation, Switch, or PC may have been funded by Microsoft.
First phase a priori Russia
As a reminder, Microsoft’s Aaron Greenberg said earlier this year that Xbox Game Pass isn’t making a lot of Microsoft money yet. For his part, Phil Spencer insisted that the Xbox Game Pass model was sustainable and that Xbox fans shouldn’t have to worry about the profitability of the thing.
Since the launch of Xbox Game Pass, several studios and publishers have complained about their decision to offer their game on behalf of Microsoft. And for various reasons. For example, the publisher of the game Descenders confirmed that the game’s presence on Game Pass has skyrocketed its sales. The studio behind the game, CrossCode, meanwhile, said it was happy with its decision to offer the game on Game Pass for financial reasons as well as the game’s popularity.
Microsoft is therefore flexible to enforce its service. Initial feedback from stakeholders and the industry is positive. So positive that Sony recently claimed it was working on an Xbox Game Pass response. The service has not yet spoken about him.
