MS is the one killing sales on their platform thanks to GamePass.
This is a big misconception, people have about gamepass.
Gamepass doesn't really kill their gamesales. You are just leasing the game for 1 year.
Let's break it down little bit.
1: people usually buy 1-5 game per month. Because games are expensive hobbies, and you will need to find the correct title to buy it. Sometimes, people don't buy a game that month.
2: aside of 1st party games, 3rd party games have 6-12 month stay time. Sometimes, 2 years depending on the contract.
3: most of the time, people don't spend above 20$ in 1 platform. For example, re8 sold 4m copies across all platforms since release date. That is around 1m copies sold on xbox, if we maintain 2x Playstation sale relationships.
4: MS adds 10-20 games a month. Gamepass as of now should have 20m+ officially, since January 2021, it was 18m.
5: You are leasing the game. You dont really own the game. The game isn't free too. So MS isn't losing any money on their sales.
These 10-20 copies of the game, are now selling 500k-1m copies per year, with gamepass, at the price of 15$(the rest are of 1st party sales).
You have 1 year contract with 3rd party games. During this time, you are selling their games at 15$ for 1 year. The money is being paid upfront for the 1st month they get dropped.
Outriders drops to gamepass this month. It has a price tag of 15$. There are other games that come with it on that month.
Gamepass users=20m users, 1 copy each.
Games on that month, 20 games.
20 games, will sell 500k copies, for a total of 10m copies. The rest of 10m goes to 1st party games.
At 10 games for that month, games will sell 1m copies.
Ms is selling 3rd party games in this case as a sale. For 15$, you are buying these games at a discount.
After the 1 year gamepass deals ends, the 15$ sales ends, and now you will need to actually buy the game to play it.
Tldr: Gamepass 3rd party games are 1 year lease. After that 1 year, you have to buy the game to play it. You are leasing the game for 15$. Every month gets a new drop of 3rd party games. Half of the sub is 1st party games, while the other half is 3rd party games.
People don't buy games alot. They buy 12 games a year. Sometimes lower than 5 games.
In sense, MS is making more money with gamepass, since they only pay the 1 year lease deal. After that, people will have to the game. Same as selling the game. In this case, people don't actually own the game. And will have to spend money again, to buy the game after it leaves gamepass.