That's all well and good. But this is the quality of quantity argument all over again.

Some dev costs of games you know:

1. GTA5 $137M
2. GOW $44M
3. HZD $47M
4. Shadow of the Tomb Raider $75M

I really could keep going. This information is all out there for all that want to see it. And all those prices are before you tack on the marketing costs. Which in some cases actually costs more than what it costs to make the darn things.Eg.GTA5 with marketing costs over $260M. Yu can tack on another $30 - $40million at least for every AAA game marketing cost to the list above.

The simple fact is, it does cost around $80M - $120Mon average to make AAA games these days. And those posts will go up a bit next-gen as they always do.

Why is this important? This is exactly why you will not see those kinda games on Gamepass on day 1. You may see them there eventually when the game is considered to be at the end of its term, but not in the first 12 months.

And this is a simple math problem, MS simply cannot afford the cost of admission to have these kind games be on their service on launch day. Take COD for instance. This is a game that across all platforms sells at least 15M copies in its first 6 months on the market. That's $900M of revenue in just under months. Not including extras like limited editions and all MTX. For MS to secure games like those, they would have to pay out well over $500M. And that just for that year, and just that one game. Then spread this out to say 4 or 5 other such games in a year. Now granted not all of them is COD, so they may get away with paying "only" like $350M for others. We are talking billions a year just to secure the titles that are coming to the platform that year.

And why do they pay that you ask? Well just take you for instance, if you know you c get COD, Cyberpunk...etc on day one on GP, would you still go out and buy them for $70? Would anyone? Hell, if MS announces tomorrow they have games like cyberpunk the next GTA, AC, COD...etc on their service I would cancer my PS5 pre-order in a heartbeat.

It's just not sustainable. Not for anyone that knows they can move the games direct to consumers at full price. Ever wondered why FIFA (or at least the latest one) isn't on GP?

That's far from the truth

programmers:
https://www.glassdoor.ca/Salaries/us-game-developer-salary-SRCH_IL.0,2_IN1_KO3,17.htm  50,923$ average
https://www.gameindustrycareerguide.com/video-game-programmer-salary/  Only senior devs are 120k+
https://www.salary.com/research/salary/posting/video-game-programmer-salary  65k Median

artist (which constitue most task force)
https://www.payscale.com/research/US/Job=Video_Game_Artist/Salary 57,264 average 71K Max
https://www.glassdoor.ca/Salaries/gaming-artist-salary-SRCH_KO0,13.htm?countryRedirect=true 58k average
https://www.gameindustrycareerguide.com/video-game-artist-salary/ from 35k to 90k for senior

Tester :
https://www.gameindustrycareerguide.com/video-game-tester-salary/ "start around USD $18,000 and top out around $55,000"

And that's all for US, game developed Salary in Canada and many other countries are way lower than this.

Average salaries at eidos Montreal : https://www.payscale.com/research/CA/Employer=Eidos_Incorporated/Salary  CAD 73K or  USD 55k
Average salaries at Ubisoft Montreal : https://www.payscale.com/research/CA/Employer=Ubisoft_Entertainment_Inc./Salary CAD 67K or USD 50K

I think your 130k figure is more accurate when it already account for other expense related to the position (employer's payroll obligation, insurance, equipment, software license, electricity etc...) 

I know marketing cost are substantial often overtaking development cost (sometime even many times over) but I was speaking dev cost only and so was Jim Ryan in the citation from the op.

"Have any idea how much an ad spot in the Superbowl cost? $5.6M... for 30 seconds." That's not the cost of creating the ads, that's is the fees for a 30s time frame for diffusing the ads during the superbowl. It does not relate to game development cost in any way shape or form. 

if we look a things differently, most AAA does not sell enough copies to justify a 100m+ budget let alone when factroring in martketing cost.
But I guess it all boils down to personal opinion on what you consider AAA. What budget do you think is enough to be considerd AAA. Is 30M enough? (I certainly think so in most case). Is 40M enough (I think I'll have a hard time telling devs there games is not AAA because the budget was only 40M)? Is 50M enough?

There is no quality of quantity argument. Plenty critically acclaimed games on the service. Only someone not familiar with it can even suggest an argument like that. 

Im aware many 3rd party games come on the service months to even years after they are new. Doesn’t mean their sales potential has been tapped out. Doesn’t mean they lost their quality. I can’t play every AAA multiplat every year so more often then not I get many when it comes on the service. 

The big draw will be when their AAA first party ramps up, for those like you who buy their games day 1. 

But that's what this is all about. You can't just say its not the consumer's concern. The platform holders certainly do not make choices without considering what the consumer wants. What you are saying shows a gross lack of understanding of how these things work.

You highlighted (or dismissed) third party game securing and prices of games. I will address these.

1. How much they pay or their ability to secure third party games is the single most important thing to a service like GP thriving. There is just no way around this. The costs associated with vs money left on the table this is what makes such a service sustainable or not, and is what dictates the very nature of the games you even see on such service. This is, not something you can just gloss over as its the single biggest advantage or disadvantage the service has.     
   
   The cost to acquire AAA third party games to launch on day 1 would be astronomical. For the simple reason that doing so will literally kill any potential sales of that game everywhere else or on any other platform. Who in their right mind would pay $50 -$70 for a game that they can play pretty much for free if they just have a $10 subscription to a service? $70 vs $10. How is this not obvious to you?
   
   
2. The way you are looking at prices going up is wrong. The simple fact of the matter is that cost of making games is always going up. The last price hike was exactly 2 generations ago (PS2/XB > PS360 gen) when game prices went up from $50 to $60. But how long it has been isn't even all that is important. What's important is that the minimum cost of making a AA or AAA game has gone up. Back with the PS1 and even the PS2, all your game had to do was sell 1M or 2M copies and you were good. You are a success. That's it. Going "platinum" was a big deal then. But now? if your game doesn't sell at least 1.5M you wouldn't even break even in most cases. Now, small studios that may only get like 500k to 1M sales for their game would seize to exist if they aren't getting more from each game sold.
   
   I hope that gives you a better understanding of this.

I actually don't buy games Day 1. Well unless its Tekken. I more or less buy them month 4 - 6. Usually, after they have got their first or second price drop or deal. 

It's really easy math to see how the model works. With 50M xboxes sold on average per gen, and gamepass now accessing windows audiences as well as android, the base can be up to 100M subscribers per month. Now multiply that by 10$. That's 1B dollars per month coming in. With that kind of money, they can finance altogether 10, top, AAA high-budget games all by themselves if they needed to moneyhat.

There's no danger here, plus Sony sell games outside of PS Now in a more agressive way, so 3rd parties are saved.

My point is, that model is only sustainable with lowbudget production(which can end up creating good products every once in a while)m but it is not sustainable with high budget blockbuster productions, I can live with the fact that we could have both models, but people pushing for companies like Sony and maybe eventually Nintendo to put their big games there will just kill the high budget aaa gaming market, and we will end with low budget productions just like Netflix.

people always tell me, but you don’t understand the market...well the Sony ceo just said what I have always said about gaming subscriptions, and where’s is nintendo why are they so silent about gaming services when it’s such a great deal?