As a developer, Game Pass doesn't benefit studios the way it was promised. Developers were told that putting their games on Game Pass would lead to increased sales through greater exposure, but that hasn’t worked out as expected. Talking to a few developers that I know they stated that while the initial spike in visibility was noticeable, it hasn’t translated into the kind of long-term sales growth theye were led to believe. Instead, players seem content to engage with their game on the service and then move on to the next title, leaving traditional revenue streams stagnant.
Yup. This seems crystal clear now, although at the time GP was introduced, Phil and others claimed that it would boost game sales. Some people bought into that rhetoric. Even though it violated common sense, I wondered for a while whether it would prove to be true. But no, it didn't. It ended up reducing sales by 80% (on Xbox).
But it's no real surprise. Same thing happened with movies. Same thing happened with music. No surprise that the same thing happened with games.
It's interesting to see how the movie streaming services - once so hot, with surprising quality - are running into trouble because of fragmentation of the market and the poor quality of shows they're churning out. The latter (churning out low-quality "product") surely would have happened with GP eventually, had that model come to dominate the way Phil hoped.
Does Game Pass harm developers in ways that are only becoming clear now. Unless Microsft is doing a huge payout, a lot of indie developers I know aren't seeing reasons to release their games on the platform and they payout has decreased dramatically since the buyouts.
I've heard other indie devs say that GP has helped. Perhaps it helps some and hurts others.
A studio I know sent the following assestment to me.
- Revenue Uncertainty: Developers often rely on upfront sales for predictable revenue. Game Pass shifts this model to a subscription-based payout, which can be inconsistent and tied to engagement metrics rather than actual game purchases. This leads to financial uncertainty for studios, especially indie developers.
MS pays them a flat fee up front, though, don't they? That would reduce uncertainty. Sounds like they also pay them based on "engagement" (i.e., how many people play it on GP). I see the point about that - but the same would be true of sales numbers. There is inherent uncertainty in how a game will perform over time. That's just built in.
- Devaluation of Games: With so many titles available for a low monthly fee, the perceived value of individual games decreases. Consumers may become less willing to pay full price for games outside the subscription, creating a "race to the bottom" in pricing.
That has certainly been the case, and it's one of the biggest arguments against this model (especially with the Day 1 feature).
- Unsustainable Expectations: Game Pass fosters a culture where players expect to access a large library of high-quality games at minimal cost. This places pressure on developers to lower prices or join the subscription service, often at unfavorable terms.
I'm not sure about this one. Do Xbox gamers really have that high of expectations? Seems to me that Xbox gamers have been starved for many years and are finally getting some good games appearing (Day 1) on the service. Even if they do expect good games on GP, I don't see how that means devs are pressured to join the service.
- Lack of Long-Tail Sales: Titles on Game Pass may experience a surge in engagement initially but suffer from reduced long-term sales as players move to newer titles within the subscription. This affects studios that rely on steady income from evergreen titles.
Sure, but the same is true for game sales in general. This isn't specific to GP.
- Indie Developers Struggle: While exposure on Game Pass can boost visibility, many indie developers report that the revenue from the platform doesn’t compensate for the loss of traditional sales. Additionally, it can be challenging for smaller games to stand out among a vast library.
Yeah, it must be tough to stand out as an indie developer.