Because craftopia and palworld have a social aspect getting a big seed of players who only played it because it was free (for them) was I think a catalyst in making palworld blow up like it did. There are too many games out there for people to look through so it probably helps get word out effectively to sell out cheap for a big initial audience like gamepass when you're a small dev. I only knew of craftopia or palworld because of gamepass at least

The flip side is Microsoft is 100% giving the above as a sales pitch to devs why they should put their game on gamepass for peanuts (paid in exposure!). That's probably some of what drives the shittier deal devs get now