Phil Spencer: 'I think of Xbox Game Pass as a content fund'

Rather than focusing exclusively on mega-hit AAA blockbusters, Xbox Game Pass helps fuel the development of experimental passion projects like Obsidian's Grounded and Pentiment games, and Xbox management sees the service as a kind of cyclic wheel that helps foster creativity.

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Game Pass is one of the most interesting and disruptive parts of the modern video games industry. The service not only packs tremendous value due to sheer volume of content offered, but the real driver is the diversity of the games included in the subscription. Microsoft's day-one first-party releases have created an environment where Xbox Game Studios devs can pitch, fund, and eventually release the games they've always wanted to make, including Minecraft offshoots like the Diablo-like Minecraft Dungeons and Rare's Sea of Thieves.

This has fostered a wide array of unique first-party games that appeal to the full spectrum of gaming, from AA indies to long-lasting service games and heavy-hitting AAA titles like, for instance, the Forza series.

Thanks to Microsoft's upfront funding model, Game Pass has created an avenue where developers can expand their horizons and take chances on something new without necessarily taking disastrous losses--the service is kind of like a buoy when a studio is faced with a sink or swim moment.

Xbox Game Pass has been transformative for Microsoft's core gaming business. The service significantly improves optics and visibility across multiple platforms, but this can sometimes work against developers and Xbox, as with Redfall. If everyone can see great games, they can also see bad ones too.

In a recent interview with Giant Bomb's Jeff Grubb, Xbox CEO Phil Spencer articulated his thoughts on Game Pass in an interesting way.

"I think about Game Pass as a content fund," Spencer said.

"That we're creating revenue for us that we can then go put back in the market, to go create a higher floor for our teams when they're thinking about...'okay how is this going to sell?' We don't gause our Game Pass deals on how many units it sells. When the game goes in, here's the payment that you get."

Spencer says that he likes to see when a game launches on Game Pass as well as other platforms. This brings a new level of scope to developers, and allows the game to enter the "sticky" subscription ecosystem that thrives off of discovery and engagement from new and interesting content. New games, including diverse and eclectic ones, keep Game Pass fresh and stave off any kind of stagnation that may occur.

"I also frankly like it when those games ship on other platforms, not every team can from a focus standpoint, because then they can really use the community feature of Game pass to sell more copies on Steam, or sell more copies on PlayStation."

"There's a benefit for them being in Game Pass, it's part of their marketing."

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GameSpot's Tamoor Hussain had an interesting question for Spencer: Is Game Pass as kind of a risk mitigation opportunity for developers?

"Absolutely. I might talk about it as way for teams to aspire to innovate a little more outside of a safe zone, because they have a guaranteed revenue source from us. We have direct reports from teams with things like 'we wouldn't have done this if we didn't know...'"

Spencer says that third-party devs are a part of this mindset as well.

"When we're out there talking to teams that say 'hey, can I get a Game Pass deal, I want this budget for my game,' sometimes we're 2 years ahead of time and if the game fits in with what we're trying to do to fit then absolutely we will sign those deals.

"I think that's a good thing for the industry, it's a good thing when we have teams doing things like 33-player co-op raids in 33 Immortals."

Microsoft is indeed funding projects that range from different genres and form factors to targeted audiences and overall scope. This creates a patchwork quilt of content where practically anyone can find something they want to play. This is by design, and it is a core ethos of both Game Pass and the Xbox video games business as a whole.