How do developers ear/split money from Microsoft's Gamepass?

[formatnone]

I don't understand how that works. Let's take a one short single player game that costs let's say 30$, it is also on gamepass, you can finish it in two days on gamepass, developer gets 10$ (probably less, because there should be some sort of MS cut)? If i play other games the same month, they share that 10$? It is probably not like i'm thinking, because that would be a pretty horrible money earning scheme, and no developer would like to be on gamepass, but there are a lot that go gamepass day one. So how do you think Gamepass works?

 

[Heazy]

MS most likely pay a license fee to rent the title for the GamePass program.

 

[TheZjman]

Microsoft probably pay them an amount to put it on the service, for the duration on it being on there.

 

[Deleted member 18951]

It's a secret.....

 

[_zoipi]

Better getting a lot of pennies in royalties, and notoriety and attachment to a brand. Why would a game want to be on PS Plus. Rocket League is your answer. Also, DLC is not included in Gamepass. Makes some sense when your game is not selling good anymore and want to increase player population.

 

[Windu]

You are overthinking it. It is probably just Microsoft giving money to someone and getting the rights to put the game on their service for a certain amount of time. Just like Netflix, HBO, TBS or whatever.

I highly doubt its based on playtime.

 

[ghostcrew]

I don't know the answer but we presumably have similar situations with music and film. How do artists make money on Spotify? Let's take an album that costs $20, it is also on Spotify. You can listen to it and everything else ever recorded for $10 for a whole month. Netflix too. You could buy Doctor Strange on Blu-ray for $25 or you could sub to Netflix and watch it.

You are overthinking it. It is probably just Microsoft giving money to someone and getting the rights to put the game on their service for a certain amount of time. Just like Netflix, HBO, TBS or whatever.

I highly doubt its based on playtime.

Click to shrink...

I think you're probably right but it *could* work per play. Spotify/Apple Music etc all pay per stream rather than a bulk payment. I would imagine Netflix is a better comparison as things float in and out of the system rather than a huge library of EVERYTHING. But just kicking the tyres.

 

[zzzyz36]

I would guess its based on time played per game. $/per min

 

[TheForgotten]

I would guess it would be like how streaming services like Netflix work out agreements with the studios for Movies and TV shows. and have a specified time limit on the rights to non MS published games.

 

[wapplew]

With how much gamepass boost game sales and the rapid growing popularity,
I won't surprise there will be a point publsuher have to pay MS to put their games on gamepass.

 

[Klobrille]

A dev from Robocraft Infinity said in an interview at E3 18 that they didn't get any cut. It was great for them to have the game on Game Pass as this lead to

• Free marketing and awareness
• Free players playing your game you could potentially monetize
• Snowball effect leading to more sales

To be fair this was just a small game though. They will be evaluating this on a game-by-game basis.

 

[Yahsper]

Microsoft pays a flat fee to the publisher of the game to get the game on Game Pass for a certain amount of time.

In case of an old game, the publisher is happy to get extra revenue for an old game since the majority of revenue for most games comes in the period shortly after launch. Getting a lump sum of money and the possibility to raise brand awareness in preparation of a sequel is a good thing for them.

In case of brand new games, the publisher could be scared that the game wouldn't sell enough to recoup development costs and enjoys the 100% certainty of at least getting a lump sum of money as a return on investment, which they estimate to be bigger than the regular revenue lost by putting the game on gamepass.

In case of 1st party titles, it raises the profile of the service, which causes more people to take a subscription, allowing Microsoft to pay more flat fees to publishers to get their games on Game Pass.

 

[SuikerBrood]

License fees, I guess. Where games that launch on the service will probably get a larger fee.

 

[Deleted member 11943]

With how much gamepass boost game sales and the rapid growing popularity,
I won't surprise there will be a point publsuher have to pay MS to put their games on gamepass.

Click to shrink...

Extreme take right here. Don't skim over this one, people.

 

[formatnone]

Microsoft pays a flat fee to the publisher of the game to get the game on Game Pass for a certain amount of time.

In case of an old game, the publisher is happy to get extra revenue for an old game since the majority of revenue for most games comes in the period shortly after launch. Getting a lump sum of money and the possibility to raise brand awareness in preparation of a sequel is a good thing for them.

In case of brand new games, the publisher could be scared that the game wouldn't sell enough to recoup development costs and enjoys the 100% certainty of at least getting a lump sum of money as a return on investment, which they estimate to be bigger than the regular revenue lost by putting the game on gamepass.

In case of 1st party titles, it raises the profile of the service, which causes more people to take a subscription, allowing Microsoft to pay more flat fees to publishers to get their games on Game Pass.

Click to shrink...

ok, that makes a lot of sense! That i think was the case for Mutant: Year Zero, to go to gamepass day one, it looked weird to me, but now i get it.

With how much gamepass boost game sales and the rapid growing popularity,
I won't surprise there will be a point publsuher have to pay MS to put their games on gamepass.

Click to shrink...

i can see that being true for multiplayer games in the future.

 

[Anthony Hopkins]

Each dev gets there cut of all the sub fees combined. Depending on the teir of game.

Example

Let's say there is 1 million gamepass subs

That's $10 mill a month.
MS cut is $5 million. Tier A Games get 1%, teir b games get 0.5% and tier c games get 0.25%, plus they get a negotiated sign up purse.

I made all this up, but it's how I have imagined it.

Take a game like fallout 4, when it came to game pass it has been out like 3yrs and it was cheap as chips, how many fallout 4s are Bethesda selling at the time? 1000 copies a week worldwide? So they are making like $5 per sale that $5000/week or $260,000 a year.
MS will know this and use this data to nagotiate a deal.
MS will be like we will give you $50,000 start up bonus and put you tier B because fallout 4 is really old and cheap. They will get roughly $50,000 a month so they would make $650000 from 1 year on game pass, which is nearly 3x the amount they are making from retail sales.

 

[psilocybe]

I guess the deal is probably different for each game. I would love to have some concrete info

 

[Ge0force]

A dev from Robocraft Infinity said in an interview at E3 18 that they didn't get any cut.

Click to shrink...

That's unexpected...

 

[NitX]

There is no standard contract as far as I know. Most common seems to be a flat fee with a set time of how long the game will be on the service. Our personal experience has been a flat fee and its a pretty good deal especially for Indies.

 

[pswii60]

Each dev gets there cut of all the sub fees combined. Depending on the teir of game.

Example

Let's say there is 1 million gamepass subs

That's $10 mill a month.
MS cut is $5 million. Tier A Games get 1%, teir b games get 0.5% and tier c games get 0.25%, plus they get a negotiated sign up purse.

I made all this up, but it's how I have imagined it.

Take a game like fallout 4, when it came to game pass it has been out like 3yrs and it was cheap as chips, how many fallout 4s are Bethesda selling at the time? 1000 copies a week worldwide? So they are making like $5 per sale that $5000/week or $260,000 a year.
MS will know this and use this data to nagotiate a deal.
MS will be like we will give you $50,000 start up bonus and put you tier B because fallout 4 is really old and cheap. They will get roughly $50,000 a month so they would make $650000 from 1 year on game pass, which is nearly 3x the amount they are making from retail sales.

Click to shrink...

No.

They just negotiate a licensing fee with the pub/dev just as Netflix would do with a movie distributor.

Game Pass will be loss leading for a while whilst Microsoft spends more on content than they receive in fees, to aggressively attract more subscribers. Which is exactly how all these types of subscription services work in their first few years.

 

[Deleted member 2254]

That Robocraft example aside I have to think it's fees like with Netflix. Microsoft pays a certain sum to get a temporary license for the game, which they'll renew or not based on how much it keeps costing and how the numbers on the game are doing on the service. I guess it's possible there's also contracts based on number of downloads, hours played or something, but it seems less likely.

 

[Anthony Hopkins]

No.

They just negotiate a licensing fee with the pub/dev just as Netflix would do with a movie distributor.

Game Pass will be loss leading for a while whilst Microsoft spends more on content than they receive in fees, to aggressively attract more subscribers. Which is exactly how all these types of subscription services work in their first few years.

Click to shrink...

There silly if they spend more then $650000 for one year of fallout 4.
That's if sales are where I stated.

 

[sibarraz]

I'm more interested to know how MS profits from this

 

[Acorn]

Probably a upfront fee for most games. Maybe with an added bonus for number of players for the bigger games or just a higher fee.

 

[Bishop89]

It's a secret.....

Click to shrink...

 

[m23]

There is no standard contract as far as I know. Most common seems to be a flat fee with a set time of how long the game will be on the service. Our personal experience has been a flat fee and its a pretty good deal especially for Indies.

Click to shrink...

Thanks for sharing that info. I guess it's dealt with on a case by case basis.

 

[ghostcrew]

I guess the deal is probably different for each game. I would love to have some concrete info

Click to shrink...

You're probably never going to get this. Just like bands don't tell you the explicit details of the recording contracts and Spotify don't tell you about their deals with labels. It's not really for the consumer to be worried about.

 

[Fisty]

A dev from Robocraft Infinity said in an interview at E3 18 that they didn't get any cut. It was great for them to have the game on Game Pass as this lead to

• Free marketing and awareness
• Free players playing your game you could potentially monetize
• Snowball effect leading to more sales

To be fair this was just a small game though. They will be evaluating this on a game-by-game basis.

Click to shrink...

Yeesh that's probably the worst answer you could expect. Devs dont pay their staff with marketing and awareness, and if they want money from those free players then they need microtransactions... and if that's the case you just make the game f2p and have an even bigger playerbase to monetize. People complain about the "PS+/GwG effect" of people expecting smaller titles to be "free" eventually, this is just going to make it worse without the immediate benefit to devs being paid to feature their game on PS+/GwG

 

[Deleted member 21709]

I don't believe that Robocraft statement.

 

[RoKKeR]

There is no standard contract as far as I know. Most common seems to be a flat fee with a set time of how long the game will be on the service. Our personal experience has been a flat fee and its a pretty good deal especially for Indies.

Click to shrink...

Quoting for awareness.

 

[dDASTARDLY]

Yeesh that's probably the worst answer you could expect. Devs dont pay their staff with marketing and awareness, and if they want money from those free players then they need microtransactions... and if that's the case you just make the game f2p and have an even bigger playerbase to monetize. People complain about the "PS+/GwG effect" of people expecting smaller titles to be "free" eventually, this is just going to make it worse without the immediate benefit to devs being paid to feature their game on PS+/GwG

Click to shrink...

Are you in business at all? An argument can be made (actually it is made) that awareness and marketing is the end all be all. Curation matters and if that curation is in a channel that's hot and one that customers have concluded is a good channel then the sales will come. Gamepass at least right now, is the perfect channel and it's not heavy with loads of useless content, it's just right.

I don't care how free a game is, if it's not in a reliable place that I feel comfortable browsing, which Gamepass unquestionably is, then I'll bite. Which can either get me to buy into the game more, or be aware of the studio and notice their next game. If it isn't, then it's just one of the thousands of games that I ignore.

Awareness is invaluable to business.

 

[boi]

I am not sure and I dont think they ever specified this. Just assume nothing is for free.

 

[broflap]

With how much gamepass boost game sales and the rapid growing popularity,
I won't surprise there will be a point publsuher have to pay MS to put their games on gamepass.

Click to shrink...

That's pretty crazy I don't think that would happen.

 

[Ge0force]

There is no standard contract as far as I know. Most common seems to be a flat fee with a set time of how long the game will be on the service. Our personal experience has been a flat fee and its a pretty good deal especially for Indies.

Click to shrink...

So indies are getting paid when they put their games on Game Pass. That's a relief.

Did your company ask Microsoft to put your game on Game Pass or has Microsoft contacted you? I'm curious how they decide what games are allowed an what not.

That's pretty crazy I don't think that would happen.

Click to shrink...

If Game Pass becomes very popular, I'm pretty sure that WILL happen. Devs would get revenue from MT's and paid DLC, which are already huge factors today.

 

[NitX]

So indies are getting paid when they put their games on Game Pass. That's a relief.

Did your company ask Microsoft to put your game on Game Pass or has Microsoft contacted you? I'm curious how they decide what games are allowed an what not.

Click to shrink...

We approached them but I am guessing they keep an eye out on promising titles and get in touch with the devs too.


Obviously I am not privy to the details but its highly unlikely the Robocraft guys got nothing for the Gamepass deal. Maybe the quote was taken out of context and was specifically about whether they get a cut of the subscriptions ?

 

[Ge0force]

Obviously I am not privy to the details but its highly unlikely the Robocraft guys got nothing for the Gamepass deal. Maybe the quote was taken out of context and was specifically about whether they get a cut of the subscriptions ?

Click to shrink...

Yeah it was probably a misunderstanding.

Thanks for your response, always nice to get information from actual developers!

 

[MysticGon]

It's probably more Netflix than YouTube.

 

[BioDigital Jazzman]

I'm more interested to know how MS profits from this

Click to shrink...

Much like a Netflix it depends on how much money they bring in vs how much they spend. The added extra is that MS gets their normal Xbox store cut for any digital purchases and micro transactions that are sold.

It probably wouldn't be super clear. Paying X amount of money to get Ark into gamepass has to take into account the fact that the user is going to need to buy a gold sub to play with their friends and also likely buy the newest expansion packs if they enjoy the game.

 

[tyfon]

I don't know the answer but we presumably have similar situations with music and film. How do artists make money on Spotify?

Click to shrink...

On Spotify it's like this:
If you are an indie/small artist you get a small cut of the subscription of the person who streamed you. So if I as a customer listens only to one artist for a whole month they won't get my whole sub. Some goes to operate spotify but a large portion also goes to the "big artist" fund.
If you are a big artist you get the same as the small artist from direct streaming + a percentage of the "big artist" fund that is stolen from the small artists..

So I really hope that they do not follow this model.

 

[ghostcrew]

On Spotify it's like this:
If you are an indie/small artist you get a small cut of the subscription of the person who streamed you. So if I as a customer listens only to one artist for a whole month they won't get my whole sub. Some goes to operate spotify but a large portion also goes to the "big artist" fund.
If you are a big artist you get the same as the small artist from direct streaming + a percentage of the "big artist" fund that is stolen from the small artists..

So I really hope that they do not follow this model.

Click to shrink...

I work in the music industry and this is absolutely *not* how Spotify works. My question about 'how do artists make money on Spotify' was rhetorical.

 

[tyfon]

I work in the music industry and this is absolutely *not* how Spotify works. My question about 'how do artists make money on Spotify' was rhetorical.

Click to shrink...

Wait, now I'm really confused.

I could have sworn I read this in an article not many weeks ago but now I can't find it..

I trust you though since you work there!

 

[ApeEscaper]

Microsoft pays a flat fee to the publisher of the game to get the game on Game Pass for a certain amount of time.

In case of an old game, the publisher is happy to get extra revenue for an old game since the majority of revenue for most games comes in the period shortly after launch. Getting a lump sum of money and the possibility to raise brand awareness in preparation of a sequel is a good thing for them.

In case of brand new games, the publisher could be scared that the game wouldn't sell enough to recoup development costs and enjoys the 100% certainty of at least getting a lump sum of money as a return on investment, which they estimate to be bigger than the regular revenue lost by putting the game on gamepass.

In case of 1st party titles, it raises the profile of the service, which causes more people to take a subscription, allowing Microsoft to pay more flat fees to publishers to get their games on Game Pass.

Click to shrink...

Source? Or are you just guessing?

Seems no one in this thread really knows just guesses

 

[ghostcrew]

Wait, now I'm really confused.

I could have sworn I read this in an article not many weeks ago but now I can't find it..

I trust you though since you work there!

Click to shrink...

What I would say is that it's a lot of dark arts... There are a lot of deals and nobody wants to talk about it. If anything, it's far more complex than what you suggested. But it's also not accurate to say that 'big bands get *this* plus *this*' because everyone has a different setup, different record contracts and different agencies collecting their revenue. Some majors have preferential rates with Spotify but then, not every 'big artist' is on a major. Look at a band like Arctic Monkeys... They're signed to Domino who are an indie label. Who knows what Dominos deal is with Spotify for their catalogue but... you can see why it's very complex.

Anyway, probably off topic at this point ;)

 

[tyfon]

What I would say is that it's a lot of dark arts... There are a lot of deals and nobody wants to talk about it. If anything, it's far more complex than what you suggested. But it's also not accurate to say that 'big bands get *this* plus *this*' because everyone has a different setup, different record contracts and different agencies collecting their revenue. Some majors have preferential rates with Spotify but then, not every 'big artist' is on a major. Look at a band like Arctic Monkeys... They're signed to Domino who are an indie label. Who knows what Dominos deal is with Spotify for their catalogue but... you can see why it's very complex.

Anyway, probably off topic at this point ;)

Click to shrink...

Yes, thanks for the explanation :)
I did read a bit up now and the reason I think my original though came from is that it's not "one users money / one users streams" but "all users money / all users streams".. So even if I only listen to one artist, my money will go to many others too..

But tbh after reading more now I would say that music royalies is a royal mess...

 

[Filipus]

On Spotify it's like this:
If you are an indie/small artist you get a small cut of the subscription of the person who streamed you. So if I as a customer listens only to one artist for a whole month they won't get my whole sub. Some goes to operate spotify but a large portion also goes to the "big artist" fund.
If you are a big artist you get the same as the small artist from direct streaming + a percentage of the "big artist" fund that is stolen from the small artists..

So I really hope that they do not follow this model.

Click to shrink...

Where did you hear this? I don't think it's true at all. I'm part of the Indies so would actually like some concrete source of where you saw this.


@edit
Just saw the other posts. Royalties are indeed a hot mess.

 

[Deleted member 49804]

A lot of different options here:
Flat fee.
Royalties compensation based on people and hours played of the game on the service.
Indirect fee in prominent marketing and advertising for a new game and those associated costs.
No money is exchanged at all, because being on Game Pass is beneficial for the developer / publisher for a very old game with additional exposure and monetisation.

 

[tyfon]

Where did you hear this? I don't think it's true at all. I'm part of the Indies so would actually like some concrete source of where you saw this.

Click to shrink...

I was trying to find the article but I can't and from what ghost is saying it was probably fake news anyway.

 

[Brown Intruder]

Yeesh that's probably the worst answer you could expect. Devs dont pay their staff with marketing and awareness, and if they want money from those free players then they need microtransactions... and if that's the case you just make the game f2p and have an even bigger playerbase to monetize. People complain about the "PS+/GwG effect" of people expecting smaller titles to be "free" eventually, this is just going to make it worse without the immediate benefit to devs being paid to feature their game on PS+/GwG

Click to shrink...

Shocked that you are looking for the negative.

 

[Yahsper]

Source? Or are you just guessing?

Seems no one in this thread really knows just guesses

Click to shrink...

Guessing in regard to Game Pass, but it's how every subscription service works that isn't music. It's also the only thing that makes sense from a business perspective. If it's worth anything in this discussion, I have a background in film financing, where I had to deal with subscription services and how they fit in a financing plan.

Even if measuring playtime and dividing subscription revenue among publishers based on that is technically feasible on such a scale, why would a publisher risk working with a subscription service that works that way? Putting your game on a subscription service is already a sure-fire way to make sure you'll earn less revenue selling the game, so it's already a risk. Why make the risk even bigger by making your revenue dependent on how long people are playing your game for in a particular month. You have bills and employees to pay. You want that money in your hands so you can budget your next game, not cross your fingers that your playerbase will still be averaging 10 hours playtime per month in march so you can keep the lights on.

It only works if it's a win-win situation.