Xbox Boss Reveals How Developers Earn Money Through Game Pass
In an interview recently, Xbox Boss Phil Spencer has revealed how deals with developers work and how they are “All over the place”.
One of Xbox’s main strategies seems to revolve around the success of Xbox Game Pass which is their premium subscription service that runs cross-platform.
This has of course raised the question of sustainability and if it is worth the outlay seeing as most of the “ecosystem “ is now on PC. Its success will depend on the platform’s attractiveness to Players and developers alike.
Phil Spencer as we know is the “Boss “ of Xbox, as the head of Xbox at Microsoft. He has been doing a lot of interviews lately regarding the release of the new hardware for the Next -Gen consoles the Xbox Series X and the Xbox Series S.
In one of these interviews with the verge, the subject of Xbox Game Pass came up and how developers are getting paid.
“Our deals are, I’ll say, all over the place. That sounds unmanaged, but it’s really based on the developer’s need. One of the things that’s been cool to see is a developer, usually a smaller to mid-sized developer, might be starting a game and say, ‘Hey, we’re willing to put this in Game Pass on our launch day if you guys will give us X dollars now’,” he said.
“[In] certain cases, we’ll pay for the full production cost of the game. Then they get all the retail opportunity on top of Game Pass. They can go sell it on PlayStation, on Steam, and on Xbox, and on Switch. […] Sometimes the developer’s more done with the game and it’s more just a transaction of, ‘Hey, we’ll put it in Game Pass if you’ll pay us this amount of money.
Others want [agreements] more based on usage and monetization in whether it’s a store monetization that gets created through transactions or usage. We’re open [to] experimenting with many different partners because we don’t think we have it figured out. When we started, we had a model that was all based on usage. Most of the partners said, ‘Yeah, yeah, we understand that, but we don’t believe it, so just give us the money upfront.
My hope is we will get there, and maybe not 100 percent, maybe some hybrid model, which I think could work. We already have a revshare relationship with most of the content creators because we have a store […] I’m hoping we can get to a model whereas we see upside, they see upside. There’s some downside risks that we can help cover which gives us certain capability with the content, but also helps them go do some things that maybe they couldn’t get greenlit on a pure retail model,” Spencer said.
“The thing that’s been heartwarming to me, as somebody who’s been building games for so long, is to see games come to the service that wouldn’t have been built [without it]. When the team, if they’re just out there pitching the publishers on a retail game, if it doesn’t fit into some Excel spreadsheet that tells you what the retail outcome will be, then it doesn’t get green-lit. You see this in things like Netflix. There are clearly shows on Netflix that would have never been greenlit by NBC or CBS, or ABC in the old model, and frankly, can have real success. And my hope is that Game Pass can get to that same level.”
This interview really shed light on Phil Spencer’s plan to include everybody, all developers on all platforms, and cater to their needs. He also makes a point to compliment the competition every chance he gets which is a smart business strategy for the gaming giant.