The exact pricing varies by region and which tier you select, but it generally works out to be cheaper than buying 2-3 new major games at launch each year. It's intended as an alternative to buying every single game you want individually - an expensive proposition when many new major titles start at $70. Xbox Game Pass gives you unlimited access to a collection of games for one monthly cost. The service has grown substantially since then, with more games, a partnership with publisher EA, a PC option, and experimental cloud gaming support. At the start, it had around 100 games that you could download and install on your Xbox console - there was no PC or cloud support at the time.
Microsoft introduced Game Pass back in 2017 as a simple $9.99 per month subscription service.