"When we started, we had a model that was all based on usage. "We're open experimenting with many different partners, because we don't think we have it figured out," Spencer said. Developers have come to Microsoft asking for deals based on "usage and monetization." 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." "That would be a flat fee payment to a developer. Then they have all the retail upside, we have the opportunity for day and date," Spencer said. "For them, they've protected themselves from any downside risk. Microsoft uniquely benefits in these types of situations by having a game launch day-and-date on Xbox Game Pass. In this situation, the developer can make money from retail sales, while Microsoft may also allow these games to release on PlayStation, Switch, and PC, with the developers taking in that revenue, too. In some other cases, Microsoft will completely fund the production cost of a game. They know they're going to get this return." "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.
That sounds unmanaged, but it's really based on the developer's need," Spencer explained. "Our deals are, I'll say, all over the place.
Speaking to The Verge, Xbox boss Phil Spencer said Microsoft makes all different types of deals with developers, depending on their unique situations. But one of the biggest questions surrounding the platform is how developers make money from it. Microsoft's subscription service Xbox Game Pass offers a tremendous value with more than 100 games in the catalog and first-party titles, including Halo Infinite in 2021, launching into the program at no extra cost.
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