People want Game Pass to do the Spotify model so bad lol
pubs/devs of all sizes are being paid up front and seeing growth across all platforms.
The very first comment of this IGN piece says it all :
That's what GP is : it's just grabbing consumers from everywhere, keep them in the xbox ecosystem and just let them spend their money as they used to. MS knows that consumer spendings on gaming are rising, they are positionning themselves for the future, they just need people to be addicted to GP with a constant flow of games added and well curated. Then consumers will do as they always used : spend money to buy more game. It's not a 0 sum game. It might not be winning money now, but I'm sure they have all the data needed to forecast the breakeven point where there will be enough GP suscribers to start to have more profit than simply selling full priced games.
Just imagine this : you take GP just for gears 5 for 1 or 2$, discover MK10 that you never thought buying because that's not your kind of game, like it and buy some DLC, or like it enough then buy MK11 outside of GP or MK 12 when it will launch. Is that an uncommon situation ? multiply this by the endless combinations of games, genres, DLC, games leaving the service that people will buy to keep,... and you can see that there are many possibilities for MS to recoup the loss of a full priced Gears 5. Then it's a netflix situation : the more subscribers => the more revenue => the more content => the more subscribers=>... They just need to start the engine and that's why they almost give it to everyone for 1$ (and once sucessful will do like netflix and increase the price, people will cry about it but that's too late and competition is already too late)
At the start, you entice your customers to the model until they grow used of paying less for a lot of games
To do this, they need to pay devs up front for now, so devs are on board with the program.
At certain point in time customers:
a) Will perceive a lot less value in games per se and perceive a lot of value in the subscription (pay less for more)
b) Will be willingly trapped in the ecosystem (Because for the end user, it's really great value)
If dev payment changes at this point in time to a model that's not as good as getting paid reasonably up front, devs will have to:
a) Bite the bullet, as the majority of customers are now trapped in that business model
b)Develop games that will maximize their revenue (and that mostly of the time is not good for the players: bloating, mtx, prioritizing game types that you can monetize easily)
c) Try their hand on the traditional online stores, while dealing with the "New Customer", that I described above.
So as some people said multiple times, right now things are great for everyone.
However, It does not guarantee that the model will not change for devs in the future.
Changes in Dev payment will always be transparent to end user, and changes mostly likely will come when the model has consolidated.
With ballooning game dev costs, this could be very problematic, even more so to small devs.
It's like investments: Past performance is not guarantee of future results.