Xbox head Phil Spencer details how Xbox Game Pass deals with developers are structured

By Sean Carey,
Ever since Xbox Game Pass launched, it's always been a bit of an enigma as to how developers and publishers get paid for including their games in the service. Now, Xbox head Phil Spencer has provided a little more insight into how Xbox Game Pass deals are structured.

Xbox Game Pass

Speaking to The Verge, Spencer revealed that deals are "all over the place" and are generally based on the developer's needs with some smaller developers tending to opt for a sum of money upfront. "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 some cases, Microsoft will also pay for the full production cost of a game's development but still allows that developer to sell their game on other platforms such as PlayStation, Steam, or Nintendo Switch. Microsoft benefits from this situation by having the game launch day-and-date on Xbox Game Pass. "For them, they’ve protected themselves from any downside risk. The game is going to get made. Then they have all the retail upside, and we have the opportunity for day and date. That would be a flat fee payment to a developer."

For other developers, they prefer a deal that's based more on usage or monetization through microtransactions from the Microsoft Store. "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.'" Spencer added that he hopes to see some sort of hybrid model that includes both usage and upfront payments that benefits all parties involved.

Over the past year, Xbox Game Pass has been going from strength to strength. In September, Microsoft revealed that Xbox Game Pass had amassed a huge 15 million subscribers — an increase of five million subscribers from figures reported in April. This number has likely increased too with the launch of the Xbox Series X|S. Microsoft stated that 70 per cent of Series X|S consoles sold at launch were attached to new and existing Xbox Game Pass members.
Sean Carey
Written by Sean Carey
Hey, I’m Sean! I joined both TrueAchievements and TrueTrophies as a staff writer in 2019. I’m a big fan of the Metal Gear Solid series and love a good narrative adventure. Most evenings you’ll find me failing to get a win in Call of Duty: Warzone.