Microsoft Spends An Annual $1 Billion Dollars For Third Party Games To End Up On Game Pass

Since its inception, Game Pass has been a building block Microsoft has wanted to construct their modern vision of what they wish their gaming platform to be. As the Netflix of video games, the platform does offer a good deal of quality for consumers. But at what cost?

According to a report from Bloomberg, during an interview with Xbox president Sarah Bond, she states that Microsoft offers a flat fee of "millions of dollars" to small publishers, along with a portion of subscription revenue. Microsoft sees spending costs upwards of 1 billion dollars to bring third party games to the cloud-based digital streaming service. This trickles down into exposure to new audiences for their games. Bond believes game Pass focuses on a steady stream of revenue rather than relying on big hits.

With 34 million subscribers to Game Pass, the subscription has challenges to prove if it has long-term sustainability in today's market. Without question, the purchase of Activision Blizzard and the Call of Duty franchise can aid in bolstering its appeal. third party developers like Capcom may question putting large games like the upcoming Monster Hunter Wilds coming to Game Pass. Take-Two CEO Strauss Zelnick has pretty much stated games like Grand Theft Auto V, Red Dead Redemption II and GTA 6 aren't coming to the service. Does it make Game Pass less enticing? Their absence is noticeable. For smaller and independent games, there could be bonuses. This holiday season and fiscal year will be interesting for Game Pass and Xbox, with upcoming games like Avowed, Indiana Jones and the Great Circle, Elderwild, and Doom: The Dark Ages, there will be a plethora of software to enjoy.   

SOURCE: Bloomberg

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