Game Pass Is A Decent Business Model, But We’re Not Getting Paid Enough

Game Pass is clearly going to be a focal point for Microsoft in the market going forward. It’s something that they’re building their first parties around, while recent steps such as introducing Game Pass Ultimate, as well as Game Pass for PC, have only seen the subscription service growing even more.

But how have third party publishers and developers received said service? With the business model for Game Pass relying on people paying fees and then being able to pay any game in its library for as long as they want, which is a much lower price to pay than actually purchasing a $40 or $60 game, what’s the financial impact on studios not owned by Microsoft?

Recently, during a panel held at Gamelab (via Eurogamer), several industry professionals gave their take on Game Pass, and while some, such as Dino Patti, co-founder of Playdead – who said the business model for Game Pass is “the first time it’s actually what I would consider fair for developers” – have only positive things to say about it, there are some who’re not quite so hot on it.

For instance, there’s Fred Wester, ex-CEO of Paradox Interactive, who feels that though the Game Pass business model is a “decent” one, at the end of the day, it also results in certain developers not getting paid enough proportionate to how much consumers play their games through the service.

“Spotify, they pay you depending on how many times your song has been played,” said Wester. “On Netflix, they pay you a fixed fee depending on what they think your [product] is worth. Those are two fundamentally different things, and that’s what you see here as well.

“OnLive, for example – they said you can have your game on our service and we’re going to attract a lot of customers, and we’re going to deliver you money based on how many hours people play the game. Now at Paradox, we loved that business model, because people play our games for three or four thousand hours. While the 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’s worth keeping in mind that it’s early days still for Game Pass, and that subscription services are still fairly new to the industry, so there’s a lot that Microsoft will still be figuring out as they hammer out just what sort of model would best suit the industry and how consumers interact with media. The point of developers not being paid based on how much consumers have interacted with their game in particular is a fair one, but Game Pass also seems to have other benefits that rear their heads in different ways- such as better discoverability, for starters.

There’s also the fact that if developers were indeed paid based on how much their games have been played, small indie developers with short games that don’t encourage a lot of replay value would (theoretically) be at a disadvantage- while there’s also no doubting that Game Pass also acts as a way for many players to try out games for a while before deciding if they want to make permanent purchases of their own, which would also stand in contrast to being paid based on interaction with consumers.