Some Developers Turn A Stern Eye Toward Xbox Game Pass After Layoffs

Microsoft sparked about a dozen different headlines when 9,000 person layoffs at the company hit Xbox in part, causing job losses, entire studio closures and game cancellations. That’s sparked many debates about the company, its future and its strategies, but it’s rare to see the developers in the trenches speak all that openly about it.

The ex-founder of the currently Microsoft-owned Arkane Studios and current President & Creative Director of WolfEye Studios, Raphael Colantonio, took to Twitter to point out the “elephant in the room” when it comes to many issues at Xbox, Xbox Game Pass. Here’s what he said about the subscription model, which offers a large number of “free” games when players subscribe:

“I think Gamepass is an unsustainable model that has been increasingly damaging the industry for a decade, subsidized by MS’s “infinite money”, but at some point reality has to hit. I don’t think GP can co-exist with other models, they’ll either kill everyone else, or give up.”

The conversation drew in Larian (of Baldur’s Gate 3 fame), Director of Publishing Michael Douse:

“What happens when all that money runs out?” is the most vocal concern in my network, and one of the main economic reasons people I know haven’t shifted to its business model. The infinite money thing never made any sense.”

Douse and Colantonio then launched into a conversation about how Game Pass very much does hurt game sales despite Microsoft previously indicating the opposite. Douse says he prefers Sony’s “lifecycle management strategy.”

The idea behind Xbox Game Pass is, at its core, the ability to give players the opportunity to play day one, first-party releases on Xbox if they subscribe. Even in an era of Xbox games moving to PlayStation, those are paid copies or on a time delay, so Microsoft thinks that still holds appeal.

That gets more complicated when it’s third party developers who are swept into the concept of Game Pass launches, a practice that feels like it’s happening with less frequency in time. This is where the “infinite money subsidization” Microsoft pays to offset lost sales comes in, but many view this as unsustainable, which is now coming up with these layoffs and closures.

Microsoft has leaned hard into Xbox Game Pass subscriptions in recent years, pushing the concept harder than its hardware sales, which have declined precipitously. Game Pass experienced a huge surge of sign-ups during the COVID years, but growth has tapered, and a ceiling has to be in sight. Microsoft is still very much viewing Game Pass as its primary appeal, but as you can see, it is starting to get harder and harder to get non-first-party developers on board. We’ll see if that can change or if the issues are set in stone.

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