There was a persistent claim that games launching on Gamepass actually provides an increase of regular retail sales.
Gears 5 seems to buck that trend. Everyone is on Gamepass playing it while retail sales are dry. I wonder whether the numbers balance out and which sales model provides developers with more return on their investment. I have had doubts on the sustainability of Gamepass for a while.
All these players on day one are a righteous haven for microtransactions though, so maybe the losses are recouped there.
Game Pass certainly gives exposure to good games that otherwise would fall flat on their face. In the same way Rocket League "free" launching on PS Plus catapulted that game to the sky. I'd argue this is certainly the case for Sea of Thieves which still makes frequent appearances in the UK sales charts to this day.
But any effect will not happen immediately, it takes time for word of mouth to spread which is why I think Gears 5 will launch softly in terms of "sales" (with most early adopters paying for Game Pass to play) but continue to have legs.
But Microsoft hasn't even marketed the physical or digital sales, only Game Pass. The annual subscription revenue they'll get in the long term will dwarf their historical individual games sales, and provide consistent forecasting and budget to invest in new content. Netflix/Amazon/Hulu/HBO/etc don't rely on microtransactions in addition to subscription revenue so I don't understand why you think Game Pass will. Of course there will be microtransactions, but they won't be the be all and end all.
And really, the existing AAA sales model is broken anyway, and dissuades publishers for taking any risks. So I welcome subscription services and Game Pass is fucking awesome regardless.