Double edged sword.
On one hand, that means the big games get to sell for full price and make all the money they can. Despite having Game Pass Ultimate, I still buy the games I really want to play.
There's smaller games I'd never even consider but I've given them a shot on Game Pass. I assume they're making money somehow. Maybe a percentage based on how much traffic they bring to the service (like YouTube). Who knows?
There are certain games that come to Game Pass the exact same day they release on PS4 and Switch for MSRP (Streets of Rage 4, for example).
There actually are big AAA games for it. Gears 5 was one of the best games of 2019 and it was there before it could be bought in stores. Other big games end up on the service, too. Games like Doom, Devil May Cry 5, Outer Worlds, etc.
At the end of the month, you don't really have anything to show for your $15 besides some memories and some Achievement points but that goes for a lot of things in this life. They're selling us something without really selling us anything.
The only problem is that we can`t really measure the impact of GP, if MS gave the sales number of Gears 5 it would help us to see if being on GP day one impacted the sales of the game in anyway.
duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"
Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"
Azzanation: "PS5 wouldn't sold out at launch without scalpers."