Ahead of the “bloodbath” that is rumored to begin later in July at Microsoft, a new report indicates that the company has also taken other steps to curtail spending. In a recent episode of The Business of Video Games podcast (via Day One), Shams Jorjani, CEO of Helldivers 2 developer Arrowhead Game Studios, implied that Xbox has frozen deals for third-party games on its Game Pass subscription service.
Referring to details that he was told during the First Playable industry event in Italy, Jorjani recalls being told about the current Game Pass deal involving developers and publishers getting “the rug pulled out from under them.” Noting that he doesn’t think this to be the end of Game Pass by any means, Jorjani said that Xbox leadership is likely trying to figure things out for now.
“I was at a trade show in Italy, had some nice lunches, some nice dinners with industry colleagues, and word on the street was that loads of people who were in the frame for Game Pass deals, i.e., you know, nothing was inked yet, but the deals were in advanced discussions. Everybody got the rug pulled out from under them,” recalled Jorjani.
“What does that mean? I mean, I think what that means is that I don’t think Game Pass is over. I mean, given that, the new incoming leadership have talked a lot about Game Pass and talked about…”
“I think they’re figuring it out. That’s my read anyway. But yeah, for the time being, it seems like Game Pass deal. Like we just did one at Kaboodle earlier in the year, and I get the feeling that it might have been one of the last ones that did.”
Game Pass has been a source of issues for Xbox since the company announced price hikes last year. While it announced earlier this year that it was lowering the prices at the expense of not bringing Call of Duty titles to the service on launch day, a report by Bloomberg’s Jason Schreier indicates that the upcoming layoffs across the division might have been inadvertently fuelled by its need to populate the subscription service.
In a video, Schreier discussed how studios like Compulsion Games and Double Fine were encouraged to develop small-scale games that would help make Game Pass feel like a more attractive service. However, with Xbox’s more recent moves, he said that Microsoft is now essentially punishing studios simply for following orders.
“A lot of these studios made plenty of their own mistakes, but in a lot of ways they’re being punished today for following orders,” Schreier said. “For listening to what they were told a few years ago. And that is just a shame, and what is going to happen is pretty brutal. The word bloodbath has been thrown around among people I talk to who know about what’s going to happen. It’s going to be bad.”
The subscription service has also faced criticism from Moon Studios head Thomas Mahler, who said that it could have worked out well if Microsoft didn’t “slop out mediocre content like a factory.”
