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Game pass developer payment "clarified"

onesvenus

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In a new interview with The Verge, Phil Spencer was asked how developers are paid.
His answer gives some information about how everything works.


How do you pay out developers? I’m a developer, I make a game, I say I’m going to put it in Game Pass, a customer pays [you] $14.99 a month. How do you decide how much to pay me, the developer?
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.” What we can go do is, we’ll create a floor for them in terms of the success of their game. They know they’re going to get this return.

[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. For them, they’ve protected themselves from any downside risk. The game is going to get made. Then they have all the retail upside, we have the opportunity for day and date. That would be a flat fee payment to a developer. 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.”

The biggest surprise for me is that they have funded some games entirely without a restriction on where it will be published in addition to Game Pass.

I think it's a really in-depth interview with him
 

Clear

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All of which largely boils down to an upfront payment based on mutually agreed valuation and restrictions. Which shows why they are moving to self-owned providers as costings are going to be way more accurate and predictable.

As I've noted before, its a great system when the titles procured aren't too expensive. However the buy-in costs for AAA, especially at the start of a new gen, are likely to get impractical real fast. Noone sinks tens of millions into a multi-year project with the goal of just breaking even or making a mild profit, its simply not economically viable to tie up large amounts of capital without the opportunity to make substantial profits from the enterprise.

If you're a corporate heavyweight like MS you can afford to wait longer to make that profit, but most game publishers and developers simply don't have that luxury.
 

Pagusas

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I wonder what type of contractual hell a dev faces if MS gamepass financed the game and they failed to deliver a complete product in the end.
 
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Ex-CEO of Paradox Interactive, 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.


"The more they play your game, the more money we pay you" - GAAS
"The less they play your game, the less we pay you" - KICK
 

Javthusiast

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How much they are getting, let say that not all is buying ultimate so in average people are paying like 10 bucks per month, tax not included...so with 15mil accounts, that's 1 50000000, 150mil USD per month? Or am I doing it wrong?

Currently many have saved a lot of money on gamepass by using the xbox gold to gamepass conversion for 1 dollar, getting so much as 3 years of gamepass ultimate for 150-180 dollars or less. I this month got 14 months of gamepass ultimate for 45€ I spend on a year xbox live gold.

So they definitely so far must bleed money.
 

Elder Legend

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IMHO GamePass will not end in a good way.

Yeah agreed. Gamepass is such a horrible proposition. Imagine paying $15 a month to play Gears 6, Forza Horizon 5, Forza Motorsport Next, Fable, Perfect Dark Reboot, Elder Scrolls 6, DOOM next, Wolfenstein Next, Starfield, Halo Infinite, and big 3rd party titles Day 1 and not having to spend $60 to $70 per title. What a rip off.. they should be ashamed.

Absolutely horrible value. Microsoft is a joke and should end the console business immediately. They are running out of money and are on verge of bankruptcy.
 
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M1chl

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Currently many have saved a lot of money on gamepass by using the xbox gold to gamepass conversion for 1 dollar, getting so much as 3 years of gamepass ultimate for 150-180 dollars or less. I this month got 14 months of gamepass ultimate for 45€ I spend on a year xbox live gold.

So they definitely so far must bleed money.
Well yeah, but let say from expiration of the promotion, if my calculation is correct.
 

DunDunDunpachi

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Yeah agreed. Gamepass is such a horrible proposition. Imagine paying $15 a month to play Gears 6, Forza Horizon 5, Forza Motorsport Next, Fable, Perfect Dark Reboot, Elder Scrolls 6, DOOM next, Wolfenstein Next, Starfield, Halo Infinite, and big 3rd party titles Day 1 and not having to spend $60 to $70 per title. What a rip off.. they should be ashamed*
*for 3 months, until the titles are cycled off Game Pass

And for a company like Microsoft -- which has fully embraced GaaS model -- you ain't gonna see all the content offered by the game within those first few months. But hey, at least you have the privilege of paying a subscription to play it and then paying again "at a discount" to keep it.
 

Elder Legend

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*for 3 months, until the titles are cycled off Game Pass

And for a company like Microsoft -- which has fully embraced GaaS model -- you ain't gonna see all the content offered by the game within those first few months. But hey, at least you have the privilege of paying a subscription to play it and then paying again "at a discount" to keep it.

1st party titles stay there forever. Red Dead Reventon 2 and Monster Hunter World stayed there for months. That's plenty of time to get stuff done.

I am not sure what you mean by your not gonna see all the content by the game within those first few months. Are you talking about DLC? Either way, I am sorry but if anyone thinks Gamepass is horrible value then they absolutely have no clue what they are talking about.


I have so many friends that can play practically any game with me and not having them to spend hundreds of dollars on the games I have and we have a lot of fun. But hey, this us NeoGaf, only console wars allowed, but having fun is clearly forbidden.
 
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cireza

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So the developers/publishers that put their games in Game Pass are actually paid ? MIND BLOWN.

As long as MS are willing to take the risk, that's a great opportunity for the developer to secure their development.
 
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mckmas8808

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This sounds amazing for devs. But horrible for the long-term survival of GamePass. Unless MS truly views it as a loss leader that's necessary to compete in the video game space.
 
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onnextflix5

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Gamepass is good, they need more single player AA games on there, gaming has always been mostly single player, yet there have very few single player games on there. Not everyone likes competitive multiplayer.
 
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DunDunDunpachi

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1st party titles stay there forever. Red Dead Reventon 2 and Monster Hunter World stayed there for months. That's plenty of time to get stuff done.

I am not sure what you mean by your not gonna see all the content by the game within those first few months. Are you talking about DLC? Either way, I am sorry but if anyone thinks Gamepass is horrible value then they absolutely have no clue what they are talking about.

Micr
I have so many friends that can play practically any game with me and not having them to spend hundreds of dollars on the games I have and we have a lot of fun. But hey, this us NeoGaf, only console wars allowed, but having fun is clearly forbidden.
Doesn't really address the issues I raised. I don't buy games like a glutton who needs undifferentiated "new" above all else. I cancelled my Netflix and my PS+ for the same reason.
 

Andodalf

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Gamepass is good, they need more single player AA games on there, gaming has always been mostly single player, yet there have very few single player games on there. Not everyone likes competitive multiplayer.

They've had some bangers on there like A Plague Tale and The Outer Worlds in the past year. And they are super single player RPG heavy now with games like Wasteland, all of Bethesda's output, Immersive sims like Prey, the Bioware back catalogue from EA is there too.
 

The_Mike

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There`s some really bad incentives there... I can`t imagine gamepass working in the long run.

When Microsoft can throw 7.5 bn at bethessa like it were pocket money, then i think they will be fine with game pass as well.

AA games on there, gaming has always been mostly single player, yet there have very few single player games on there. Not everyone likes competitive multiplayer.

Personal opinions being stated as facts, when did we come down to this?

Some people prefer online over single player. If I could buy the cod only component without the single player I would do it in a heartbeat as I don't care at all about the campaign. This goes the same with 99 percent of the games I play.

Only difference is, I don't state it as facts.
 
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Javthusiast

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GamePass is the first step on the way to monopolize the industry in 10 years.
And during this first step it needs to be a great value with little censorship or other bullshit towards devs n audience.

It is not gonna be like that always so everyone needs to enjoy it while it is like that.

Yep, that's how they start. Be as consumer friendly as possible, once you are the big dog, do what you want even if it means fucking people over.
 
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FritzJ92

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I don't understand how people think the Gamepass model is terrible. A game on Gamepass isn't exclusive to that service model. They are increasing their earning channels, something every business tries to do.

MS is earning at least 150 Mil per month at the moment (most customers does not know about the $1 multi-year upgrade for GamePass) (I'm assuming maybe 5million of those 15million+ has taken advantage of the upgrade live then pay $1.00)
That's 1.8 Billion per year +/- a few million
All games on GamePass are still sold in the traditional model through B&M stores and Digital sales (which also bring money in the dev & MS pocket)
.... for comparison

Spiderman (Sonys highest selling game) sold 13million, which is $780 millions of dollars (assuming everyone bought it at $60 (I got it for $10))
This means sony would need 3 games to sell 13 million copies each to make the same amount as GamePass annually.

There are variables though, as the cost to make the game, distributions costs (Gamepass doesn't have that), marketing cost, and server maintenance cost

Essentially, the MS method in the long term is a sustainable model, as long as most games are first-party, if they have a bunch of expensive 3P AAA titles on there it will eat available profit, and benefits the developer and user more than anything while hurting MS profits...

Also, people complaining about not having to spend $60 for 1P games have a weird logic to me, when was saving money a bad thing, or is it because MS did it so it's bad...

Sidenote- Playstation's OWN CEO has commented on trying to compete with GamePass, so clearly, its a model that he likes, especially since he's tried down talking it multiple times
 

Derktron

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You can tell the people on here are just haters of Microsoft. It goes the same way when it comes to Apple, they hate them but it's still successful. It's the same thing you all do to Nintendo sometimes. Claim doom but they are still kicking it and it's getting tiring to see the same arguments. Gamepass is the future. Now if Microsoft gives up on it early then others would be happy to take over. That's what happened to Blockbuster when Netflix was coming about with their streaming services. I would say more but rather not get banned for speaking how I really feel.
 

Derktron

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So MS basically pays the dev upfront, absorb all the risk allowing more games to come to existence, and they don’t even force them to be exclusives.

Now that’s very CONCERNING, clearly this evil must be stopped or made illegal.
Lol, you sound like a damn old fart who refuses to see the future. You acted like those who hated the idea of Netflix is the next thing for movies and probably hated the idea of music streaming services like Spotfiy. I'm sure if Sony did that, you would clap for them right?
 

DaGwaphics

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As I've noted before, its a great system when the titles procured aren't too expensive. However the buy-in costs for AAA, especially at the start of a new gen, are likely to get impractical real fast. Noone sinks tens of millions into a multi-year project with the goal of just breaking even or making a mild profit, its simply not economically viable to tie up large amounts of capital without the opportunity to make substantial profits from the enterprise.

If MS foots the bill for even half the production, but doesn't impose restrictions on the sale of said game on PC/Xbox or PS, that sounds like a win for the developer to me.
 
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Derktron

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If MS foots the bill for even half the production, but doesn't impose restrictions on the sale of said game on PC/Xbox or PS, that sounds like a win for the developer to me.
That's something that would be good for both Microsoft and devs. Only if they are fair and pay a share. Unlike Spotify where they were accused of not paying small artists anything upfront.