Xbox Game Pass seems to be making waves for all the right reasons recently, and yet another as surfaced, it’s the first subscription to be “fair to developers” according to Playdead and Jumpship co-founder Dino Patti.
Speaking on a panel hosted by GamesIndustry.biz at Gamelab 2019, Patti touched on the model offered by Game Pass to developers outside of Microsoft’s first-party studio acquisitions. “With subscription models, there are two angles: the consumer angle and the developer angle,” Patti Explained. “Consumers want as many games as possible, as cheaply as possible… But the developer needs to look at what [the deal] gives them.”
While Microsoft’s first-party studios will be judged on a certain set of metrics, when it comes to third-party studios the deal has to be arranged to make sense up front.
“For me — and I might be a bit biased — but I think the way the business is with Game Pass is the first time subscription is what could be considered fair for developers,” Patti added. “All other business models that have been suggested with subscriptions have never worked out, because they didn’t know what developers actually need.
“With Game Pass, Microsoft is doing it correctly, I feel, for the developers.”
Paradox Interactive’s Fredrik Wester, who was also a panelist at Gamelab 2019 chimed in on the subject, and the common mistake that many make in comparing Xbox Game Pass to the services of Spotify and Netflix, treating them as though they are “the same thing with the same business model.”
The truth is, that’s really not the case. While, for consumers, the deal might well be very similar thus creating such comparisons, it’s behind the scenes where the differences lie. These differences are, ultimately, what makes the Xbox Game Pass work so well for many developers, but maybe not so well for others.
“Spotify pays you depending on how many times your song is played,” Wester explained. “Netflix pays you a fixed fee, depending on what it thinks your TV series is worth. They are fundamentally different things, and that’s what you see [with Game Pass] as well.
“OnLive, for example, they said, ‘You can have your game on our service, we’re going to attract a lot of customers, and we’re going to deliver you money based on how many hours people play your game.”
Wester explained that the business model above works wonders for a company like Paradox, “because people play our games for 3,000 or 4,000 hours” and further explained that the Xbox Game Pass model is still perfectly viable to the company “but we think we’re not getting paid enough, because people play our games more than they play very single-player, narrative-driven games.”
With such a vast portfolio, Paradox can simply afford to “try anything” as Wester put it. So while the business model might not be perfect for Paradox’s portfolio of work, it doesn’t mean that the company has nothing to gain from dabbling within the Xbox Game Pass.
However for the majority of developers, Xbox Game Pass and services of its kind are a large part of an ever increasing landscape of potential growth.
“I’ve never seen anything like this in my 16 years in the industry,” Wester stated, in address the publication deals now available. “People are throwing money at everything, and if you can’t make money today in the games industry then you probably will never be able to make money, ever, in this industry — if you’re an established company, because new companies always struggle.
“I think what you need to consider now when people throw that money at you is, in three years from now when the pendulum has swung back, and you’re standing there knocking on Microsoft’s door saying, ‘Please let us in again’ — which is going to happen eventually — is your business model sustainable? And do you have direct access to the people that play your games? Those are the only two things you need to think about.”
We are indeed in the mist of a new era. Xbox Game Pass opens doors to a host of players and allows them to discover titles they never knew they needed. Allowing developers the model they need to produce their visions to the highest quality can only be seen as a good thing for the industry, in all aspects.