The debate over whether Game Pass can generate sufficient profits for Xbox and its participating studios has been ongoing for a long time, with data showing that user growth for the service has stalled. Former PlayStation executive Shawn Layden stated that it is basically impossible for developers to make money relying on Game Pass, as the subscription service business model is fundamentally incapable of achieving this. Game studios develop titles not just to recoup costs, but to achieve profitability.
In a recent interview on the podcast "The Expansion Podcast," Layden stated bluntly that he doesn't believe developers can profit through Game Pass. He compared this subscription model to a casino: the house always wins, and in this case, the house is Microsoft.
Layden stated, "Developers always hope to participate in revenue sharing, cross the break-even point, and start generating profits from their games. But under the subscription model, this is simply impossible."
Layden pointed out that while developers want their games to be profitable, the Game Pass model makes it difficult to achieve this goal. Small indie games can gain exposure through subscriptions, which helps them. However, this model is not friendly to AAA titles.
A buy-to-play game priced at $70 has the chance to break even and turn a profit, but this is hard to achieve within the Game Pass ecosystem. In Layden's view, this is also a major reason why PlayStation exclusives generally perform better than Xbox exclusives.