Following the mass Xbox layoffs (3,200 employees to be cut by July 2027, not to mentionall the codev partners and vendors), developers and analysts started looking into what happened for the division to reach such a low point, and the failure of Game Pass came up in most conversations, especially when a new report revealed that the subscriber base actually decreased from 34 to 30 million. Moon Studios CEO Thomas Mahler, for instance, opined that they never delivered the big hits a subscription service would need.
Anyway, the big question mark now is pertaining to the future of Game Pass. To this end, Bloomberg’s Jason Schreier shared some interesting details in the latest episode (#313) of the Triple Click podcast. Schreier believes Game Pass won’t die, but Xbox will likely have to remove day-one availability for many of its biggest games because it doesn’t make sense financially. They have already started doing so with Call of Duty, after all, and it wouldn’t be surprising to see other games join that exclusion category. Moreover, Schreier shared that several leaders of Xbox-owned studios hate Game Pass for devaluing their games.
I think they keep it going, but at some point, they’re just going to remove day one sales, because that makes no sense anymore. So, Matty, to your point earlier, you take a game like South of Midnight, that’s a game that was not exactly critically acclaimed or anything, but the people who really loved it, really loved it, really spoke to them. And that’s a game that costs $40 to buy, but on Game Pass, you can get it for, what was it, $15 a month, $20 a month, whatever it was at the point that that game was released. And so, not only is that kind of this, put this load on it that I can’t really support as being part of the subscription service, trying to grow the subscription, it also is being completely devalued to the point where people might be like, why would I spend $40 on this when I could just get it on the Game Pass service for, quote, unquote, free, or for my monthly subscription charge?
And that, I think, happened to a lot of games, and there are a lot of people out there in studio leadership within Xbox who absolutely detest Game Pass and think it has destroyed the value of their games, think it has taken away from the value of all games in general just as a service, and just has contributed a lot of just… It’s been a detriment to the games industry and those people’s views because of how it devalues games. And so, Netflix, I think, is a little bit different just because the stuff that is getting put on Netflix cannot be bought separately. You cannot go and buy Electric State or whatever.
Game Pass has been central to a strategy that Xbox has pursued for nearly 10 years. The dire state of the division (a mere 3% accountability margin, down year-over-year), highlighted in Xbox CEO Asha Sharma‘s latest memo, is largely attributable to its failure. Phil Spencer, who famously championed Game Pass from the very beginning (even against his own staff), likely wouldn’t have been able to rework it out of the core of Xbox’s future strategy, but Sharma has no such burdens or qualms. I agree with Schreier: many big games, such as The Elder Scrolls VI, will likely be removed from day-one availability and added later, when most full-game sales have been completed.
About the author: With over two decades of experience in gaming journalism, Alessio Palumbo has led the gaming vertical at Wccftech since August 2015. He started working at a young age for Italian websites like Everyeye.it, Gamestar.it, Nextgame.it, and Multiplayer.it before kickstarting the indie English-language publication Worlds Factory as its founder and Editor in Chief.
In the last decade, he has coordinated the overall output of Wccftech’s gaming section, managed PR relations, assigned reviews, produced daily news coverage, edited gaming content as needed, and delivered game reviews.
Arguably, his trademark content is the long series of exclusive developer interviews that have been cited by Wikipedia and by the biggest news media and gaming publications.
His passion for technology also makes him knowledgeable when it comes to gaming hardware and tech. His favorite genres include RPGs, MMORPGs, and action/adventure games.
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