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Dante9 said:

I'm more interested in what third parties are getting out of GP. Does anyone know how it works? How much are they compensated for giving their games out for free, basically? Is it profitable enough for them in the long run? Is it profitable enough for Microsoft in the long run?

The negotiations and contracts are different for every game, but I don't think any developer or publisher would accept the deal without reaching a number that pleases them.