Hot on the heels of the layoffs that have swept through Xbox, the founder of Microsoft-owned Arkane Studios has hit out at Game Pass, whose subscription mannequin he referred to as “unsustainable.”
Raphael Colantonio, who based the Dishonored and Prey developer and served as its president earlier than leaving in 2017 to start out Weird West maker WolfEye Studios, took to social media to ask: “Why is no-one talking about the elephant in the room? Cough cough (Gamepass).”
When requested to develop on his ideas on Game Pass, which Weird West launched straight into as a day one title in March 2022, Colantonio stated: “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.”
Colantonio’s remark sparked a vociferous debate about the execs and cons of Game Pass in industry phrases in addition to for the buyer. Microsoft's subscription service has been referred to as many issues over the years: the demise of the video game industry; the savior of smaller builders who benefit vastly from funds made by Microsoft to secure their video games; and the whole lot in between. During the great Xbox FTC trial to decide the fate of Microsoft's $69 billion aquisition of Call of Duty maker Activision Blizzard, then PlayStation boss Jim Ryan claimed that he had talked to "all the publishers" and that, unanimously, all of them hated Game Pass "because it is value destructive." He additionally stated Microsoft "appears to be losing a lot of money on it."
Back in 2021, Xbox boss Phil Spencer countered Game Pass doomsayers, saying: "I know there's a lot of people that like to write [that] we're burning cash right now for some future pot of gold at the end. No. Game Pass is very, very sustainable right now as it sits. And it continues to grow."
That was 4 years in the past. What about now, in the wake of cuts which have seen Rare's Everwild, the Perfect Dark reboot, and an unannounced MMO in the works at developer behind The Elder Scrolls Online all canceled?
Colantonio’s feedback have been backed by a quantity of industry friends, together with the former VP of biz dev at Epic Games. Michael Douse, publishing director at Baldur’s Gate 3 developer Larian, said that the greatest concern proper now revolves round what occurs when all that money runs out. This, Douse added, is “one of the main economic reasons people I know haven't shifted to its business model. The infinite money thing never made any sense.”
(It’s value noting that Baldur’s Gate 3 has up to now not launched in Game Pass or PlayStation Plus.)
Colantonio then ridiculed Microsoft’s insistence that launching video games into Game Pass didn’t impression gross sales, only to later admit the contrary.
Douse responded to to say he prefers the Sony approach of doing issues. Sony’s PlayStation Plus coverage is to maintain first-party video games off the subscription service at launch, solely including them some time later. That’s why you received’t see this yr’s Sony’s Ghost of Yotei launch straight into PS Plus, however you will notice Call of Duty: Black Ops 7 as a day one Game Pass launch.
“The economics never made sense, but at the same time I do recognize that for smaller teams with new or riskier IPs it helped derisk,” Douse stated. “Much prefer Sony's 'lifecycle management' strategy.”
"Yeah, the only way GP can co-exist without hurting everyone is for the back catalogue," Colantonio concluded.
Reports have indicated that Microsoft’s layoffs were more about the company’s high-profile push into AI than any failing with the gaming business, however Colantonio suggested this was “a bs excuse.”
He then went on to insist that “the maths don’t work for most publishers/devs nor for Xbox once they stop investing.”
Colantonio was additionally requested why Microsoft would proceed to push Game Pass if it have been unsustainable, even now, eight years after it launched. He responded to say that Game Pass isn’t profitable, Microsoft continues to be in the "customer acquisition phase", and the firm hopes that at some point, subscription income will make its vital investment repay.
Colantonio defined that Game Pass on its own can’t be thought-about profitable since you need to issue in the billions of {dollars} Microsoft has spent buying content material for the subscription service, and he consists of Bethesda proprietor ZeniMax and Activision Blizzard in that equation. “It’s a spreadsheet trick where they don’t put that detail in a profit and loss section, but instead in the amortization over time,” he claimed.
Game Pass is of course an unbelievable deal for the gamer that lets subscribers dip in and out of a long checklist of video games for a fraction of the price of shopping for these video games standalone. Game Pass is commonly stated to be too good to be true as a result of of how low cost it’s relative to what it gives. When you throw in each game Microsoft has on its books as a day one Game Pass launch (Call of Duty included), the deal feels even higher.
For Colantonio, although, the Game Pass deal is “too good.”
“What *might* happen once MS has won: the games will start to suck and your sub will go up,” he added. “Why? Because the current amazing deal you have is subsided by MS bleeding money into it with the hope they’ll kill the competition, but once they manage to do it, things will get real.”
He added: “… it’s a long game that involves throwing a tsunami at the entire ecosystem of the industry. Only the gamers like it because the offer is too good to be true, but eventually even gamers will hate it when they realize the effects on the games.”
Microsoft doesn’t report on the success of Game Pass both approach in financial phrases. Indeed, its reporting on its gaming business is imprecise at finest. In its final financial report (for the quarter ending March 31, 2025), Microsoft stated Xbox content material and companies grew 8% year-over-year, which was in half as a result of growth in Xbox Game Pass. PC Game Pass income elevated 45% year-over-year. But we don’t have an up to date determine for how many subscribers Game Pass has, nor how a lot money it brings in.
In an April interview with Variety, Microsoft gaming boss Phil Spencer was requested how he views Game Pass’s ongoing function in the bigger Xbox business. Spencer replied to say he thinks about Game Pass as “a healthy option for certain people,” however admitted “it’s not for everybody.”
“Our biggest areas of growth right now are PC and Cloud, which makes sense, since consoles, all up, are a good business, they’re an established business, but they’re not really a growing segment in gaming," he said.
"So we’ve got good growth on PC, we’ve got growth on Cloud, in terms of users and hours. And console continues to be a really healthy part of Game Pass. But there isn’t a unique need for Game Pass to be the only way for people to play. If everybody who’s a Game Pass subscriber instead decided to buy their games, that’s good for the business as well.
“For me, I look at Game Pass as a healthy option for certain people. It’s not for everybody. If you play one or two games a year, Game Pass probably isn’t the right business model for you, you should just buy those two games, and that would make total sense. But I want you to have the choice. So we remain focused on everything that’s on Game Pass is also available to buy. We’re making those games available to buy in more places.
“And I look at the overall hours of people who are playing on Xbox, playing our games, and that’s a number that continues to grow fairly substantially, and that’s really the metric I think about for success. And Game Pass has been an important part of that, but I don’t try to solve for Game Pass specifically on its own. It’s kind of part of the equation for Xbox finding new players.”
Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can attain Wesley at [email protected] or confidentially at [email protected].