Gamepass made around 5 billion dollars last year for Microsoft. Its a monthly fee of course it makes money. Seems like they are banking on the COD crowd to push through the price hike and keep the service alive. Thats quite a gamble.
It's 5 billion dollar
revenue. MS never disclose how much they pay for those game licenses and how more they need to paid for getting AAA games on XGP day one.
And if it's first party games funded by MS, MS also never disclose potential launch period sales loss v.s XGP sub increase on their end.
Without other data like profit margin, revenue is a useless data to discuss how profitable a business models is. It's only useful for PR, that's all.
They probably negotiate their deals case by case anyways.
Like I said, devs are probably only going to agree on day one release on XPG if MS pay them well enough. If MS money < potential launch period sales then dev wouldn't release their games on XGP day one and vice versa.
So increase sub = better deal MS can offer to developers to get XGP day one release = technically more money for developers in the end. Because in this case developers always have the choice to not launch games on XGP day one if XGP doesn't offer good enough benefit.