

No one is saying that it should be free. The issue is that $50 for a straight port of a 13 year-old game is ridiculous when Sony’s competitor offers free backwards compatibility—and 4K upscaling. Microsoft absorbed their expenses for that as the cost of doing business, and it would be a blip on Rockstar’s balance sheet as well, since they make a perpetual avalanche of money from GTA Online. There’s really no credible justification for a price this high.
Netflix pricing has always had a lot of pressure on it because the company has no product diversity. All Netflix offers is Netflix, so all of its revenue comes from there. Meanwhile, MS has Office as the world’s default productivity suite, and it rakes in billions from corporate Windows licensing and cloud services. As of about a year ago, gaming was actually less than 10% of their annual revenue. So they can support narrow margins on Game Pass pretty much indefinitely. And they are motivated to do so as the heavy underdog to Sony, whose consoles consistently outsell theirs by a ratio of about 2:1.