To be clear, it never seemed like all of those "Day 1" gamepass games was ever profitable for these big releases. Games like Avowed seemed to get less buzz for a game that it was, and I think because gamepass sort of "contained " its hype or excitement in a lot of ways. At best, I would liken their previous pricing strategy to what Uber did when it was trying to gain market share. Just have a service that is unbelievably cheap that it seems unreal, get people used to using the platform, and jack up the prices once you have enough "market share." Now I have no idea how much market share Microsoft has among all game subscription services like EA's, Ubisoft's, and Playstation's, but I suspect they are the far away winner in that category in part due to these implausibly profitable deals.
I wonder at what balance though does Xbox make money with gamepass, cause even at $30 a month, it will turn off enough people that it will drastically reduce the number of subscribers either totally or to lower tiers.