Why does Netflix cancel somewhat popular shows after 3 seasons?
It's because the show has done as much as it is going to do with key metrics: Getting new people to sign up for the service, retaining people, and overall engagement.
Once a show hits 3 seasons, it's no longer bringing new people in, nor is it really retaining people in most cases.
Microsoft pays for games on GamePass or they fund games (internally). That game isn't going to recoup its own costs, so what Microsoft is measuring is how well it performs before deciding to greenlight the next game.
If engagement is too low, the risk is too high. Games take way longer to make than tv shows and thus that risk calculation needs to be done far in advance and it needs to be made based on current subscription revenue and future trends.
If I want to greenlight 8 games based on 15% annual growth in the subscription service, what do I do when there is only 4% annual growth or worse the growth is flat.
What happened with MoviePass was no matter how much they grew, their costs only grew with them. Microsoft took on Bethesda and ABK, massively increasing their operating costs, capsizing GamePass by including their games.
Unless you're subscribing to GamePass AND buying their games outright, you're not going to be able to really support individual devs. And you have to keep your GamePass year round. Canceling GamePass and signing up for a month or two just when a game you want to play comes out, doesn't support the dev.
Where the dev expected 70 dollars worth of revenue generation, two months of GamePass is only 40 dollars, and that doesn't go directly to the dev, since it's spread across all of GamePass.
The only way GamePass works by itself is if it can generate enough subscribers that more than encompass the collective development costs + B2P sales. That's why they're releasing games on PC, PS5, and Switch, because like many said early on, that math isn't mathing.
Microsoft expected they'd have 100 million subscribers by 2030... They're probably at 30-35 million right now with flat growth... they're never going to reach 50 million let alone 100 million.