According to Bloomberg, Microsoft currently "spends $1 billion a year getting third-party games on the subscription service." This total is said to be based on not only the "flat fees of millions of dollars" that Microsoft pays various studios and publishers, but also a "portion of subscription revenue" that is then paid out. Further details on Microsoft's process of determining how much each publisher should earn for being part of Game Pass wasn't revealed, but more high-profile, AAA titles are surely the ones that cost the most to join the service.
While this might seem like an asinine amount of money (which it is), Xbox Game Pass typically makes back this much relatively quickly. Based on previous information that has been made public, there are a little more than 30 million Game Pass subscribers at the moment. Assuming that each subscriber then pays an average of $15 or so, it would suggest that Microsoft makes back its investment in Game Pass over a period of two or three months.
Still, with video game development costs quickly rising, there's a good chance that Microsoft will have to begin offering even more to various publishers to add their titles to Xbox Game Pass. As a result, this $1 billion amount will almost certainly pale in comparison a few years from now to the total that Microsoft invests in the service today. For all of these reasons and more, this is likely why Microsoft chose to raise the price of Game Pass this month while also introducing new tiers of the subscription platform.
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Source: https://comicbook.com/gaming/news/xbox-game-pass-gamepass-cost-report/
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