Gaming News Does Xbox Game Pass Really Help Indie Studios?

A few days ago, Gareth Damian Martin, author of one of the most acclaimed narrative RPGs of recent years, Citizen Sleeper, spoke about the Xbox Game Pass offer, formulating the hypothesis that the license would probably not have had the same success without its release in the Microsoft service.

(Players) all say, “I don’t play these kinds of games, but I tried it because it was in Game Pass and I loved it.” And that was huge for Citizen Sleeper. Honestly, I think Game Pass keeps a lot of independent studios going today. The money is paltry for Microsoft, but it’s the reason we can make a new game.

A vital welcome land for certain developers, the service of Microsoft has nevertheless encountered new detractors in recent months, evoking a virtuous system which is beginning to collapse. In an interview at the latest Game Developers Conference in San Francisco, the developers of Slay the Spire and Darkest Dungeon said in hindsight that the markets that some small developers have been able to rely on in recent years for funding were not no longer what they were. Main platforms targeted: Epic Game Store exclusives and Xbox Game Pass. Casey Yano, co-founder of the Mega Crit studio, gave this speech: “I spoke to at least five small teams, 35 members or less, during GDC, and they all come back to the same thing: Cuts, cuts, cuts, canceled funding, discussions that have been going on for a year , canceled. We are truly very privileged to be able to self-finance. Otherwise I would be very, very, very scared right now“. Launched in early access on Steam, Slay the Spire initially had rather weak beginnings before becoming a deckbuilding giant. Darkest Dungeon is also a benchmark of its genre, and both are available on Game Pass PC, although Darkest Dungeo director Chris Bourassa said that Microsoft’s offerings for games of this type have “lost their magnitude” since the subscription service was launched. And “ithe same goes for Epic”, according to Bourassa who concludes: “The gold rush is over.”

It is obvious that it is very difficult for independent developers to obtain financing in an oversaturated market. And while Epic and Xbox acted as a bit of a beacon in the night, the latest observations seek to signal a decline in the offer offered. For years, Microsoft has concluded hundreds of partnerships with just as many developers with the aim of easily inflating the Game Pass offer, in exchange for a few hundred million euros. Same process for Epic Games, which has already spent the crazy sum of $210 million in minimum guarantees during the first wave of EGS exclusives in August 2019. Consequence: the store was not profitable before November 2023. In 2022, Microsoft was pleased to have paid developers “more than $2.5 billion in royalties” as part of the publisher’s indie initiative, ID@Xbox. He also revealed that Xbox paid developers and publishers “hundreds of millions of dollars in Game Pass licensing fees”. A golden period for small developers during which Josh Sawyer in particular, design director of Obsidian, believed that the game Pentiment owed its existence to Game Pass. But the wheel seems to have turned according to the latest statements.

Visibility at what price?

In November 2023, on the sidelines of the last edition of Paris Games Week, Guy Richards, director of ID@Xbox, nevertheless still certified that independent creators have never been so important for Xbox and “that they will continue to be“The program, which began ten years ago and was further expanded early last year, is dedicated to supporting creators who need help with their self-publishing projects while also showcasing them in Game Pass.

The team working with independent creators has never been larger, and we’ve never invested more in independent games, whether through ID@Xbox or the Developer Accelerator Program, designed to support creators from underrepresented groups.

The visibility gained is obviously phenomenal. Latest successes proudly cited to date: Sea of ​​Stars from Sabotage Studios or Cocoon from Annapurna Interactive, which were part of Xbox’s Game Pass subscription on the day of their release. The first surpassed four million players in just a few months and sold more than 250,000 copies, which was the studio’s sales goal for the entire year. Yet the initiative is increasingly seen as a disadvantage, particularly since Microsoft acknowledged that the subscription service was “cannibalizing” base game sales. As part of an investigation linked to Microsoft’s acquisition of Activision-Blizzard, the American giant admitted that the inclusion of a game in Game Pass could have a negative impact on its sales. A revelation supported by a report from the CMA (Competition and Markets Authority), which shows that a game’s sales decline for twelve months after its addition to Game Pass. In this same report, we learn that Microsoft declared that Activision was far from being in favor of seeing its games arrive on Game Pass or any other subscription service. Comments that drastically contradict Xbox chief Phil Spencer’s 2018 claims that Game Pass is boosting sales rather than undermining them.

“When you put a game like Forza Horizon 4 on Game Pass, you instantly have more players of the game, which actually leads to more sales of the game. You say, ‘Well, not everyone is going to- “Don’t you just subscribe for $10 and go play this thing?” But no, players find games based on what others are doing.

Instead of noting long-term disappointments, the Xbox team is instead reinforcing the direct alternative advantages or those which have an impact on the visibility of independent games. If independent developers seemed to be okay with this cannibalization, it’s probably because Xbox until now gave them enough money in advance to compensate for the risks linked to the release of their game. But now, the deal seems less interesting.

10 minutes to convince you?

There have always been two arguments about the profitability of Game Pass for independent developers. On forums like Reddit, consumers make their arguments: “Most of the indie games I play on gamepass, I wouldn’t have bought anyway, so I don’t think they’re missing out on anything. It actually gets more people playing and talking about themselves, so I think it’s actually beneficial for them”, says one, when the other retorts: “A lot of good indie games won’t be on Game Pass, so if people can choose between playing games on GP or buying a game that isn’t on GP, ​​I think many will choose to play the ones that are on GP . This may harm some independent developers, but benefit others.”Today, it appears clear that the service is not the El Dorado dreamed of for everyone. Dino Patti, the developer of Somerville, spoke in 2023 with videogames.si to claim that Game Pass “harms sales”even though the team concluded “a very good agreement” with Xbox to bring the title to the service.

We reached a very good agreement. I also think it hurts sales. Because a lot of people go there to try it and don’t put in the effort. What if they don’t like the first 10 minutes? It’s finish. Likewise, if you don’t make the first ten minutes amazing, maybe that’s a problem too.

Somerville’s starts are indeed difficult. I wrote on this subject that the handling is frankly not pleasant, the perspectives remind me of the difficulties I had already encountered on Little Nightmares and the game really lacks intuitiveness. Observations which could therefore be shared by a few thousand Xbox Game Pass subscribers who chose not to continue the adventure. Patti added that he preferred the old model of selling games outright and having to “deliver” on what was advertised. “What I prefer is the old premium model, where I sell you video, big images, and earn your $30. Then I have to deliver the goods to you. I don’t need to take money from you later.”

It’s undeniable, Game Pass fundamentally changes the way players buy games as well as their mode of consumption. And when Chris Charla, from Xbox, assures GamesIndustry.biz that the model does not disrupt the market in any way, many find it hard to believe: “It’s additive. People still buy a lot of games and they still buy a lot of games on Xbox. They buy games through Game Pass at a discount, which is what they get as members. So I don’t think Game Pass has been a disruptive business model, it’s been additive in a very positive way”. But even on the consumer side, enthusiasm seems to be waning. In recent years, Game Pass has received myriad praise for its consistent offering of AAA games and cross-platform hits, enriched by a variety of smaller titles. The appeal of subscription also lies partly in its element of surprise: we can discover great indie games and see them become our favorites. But according to some views, like that of Kotaku journalists, “the giant is banking more on AAA giants like ZeniMax and Activision Blizzard, and not on the depths of its catalog of independent games”. Direct consequence: subscribers have the impression that their subscription has less value during off-peak periods and indies no longer seem to benefit from it.