We are now approaching the business end of new Xbox CEO Asha Sharma’s sweeping reset of Microsoft’s gaming business, with layoffs and studio closures likely in the coming weeks. And there are now signs that Sharma isn’t done adjusting the Game Pass offering, either.
According to Fernando Rizo, a consultant who advises self-publishing indie studios, Xbox is suspending discussions with third-party studios to sign deals to put their games on Game Pass. Rizo recently said on The Business of Video Games podcast that he’d spoken to a number of developers negotiating with Xbox who “got the rug pulled out from under them.” Rizo’s impression is that the deals were “on pause” rather than canceled, as Xbox seeks to reassess its Game Pass operation.
“I definitely don’t want to oversell what I know,” Rizo later told Eurogamer. “But I had spoken to a number of devs that had Game Pass deals in various stages of negotiation who were told the deals were on hold. I don’t personally think this is the death of Game Pass or anything, probably just a new CEO wanting to get her feet under her desk and everyone aligned on strategy before the Game Pass team starts cutting checks again.”
A handful of developers getting their Game Pass deals paused at the same time doesn’t necessarily constitute a policy or even a trend. All the same, Rizo’s read of the situation seems very plausible, given the dramatic reassessment of the entire Xbox business that Sharma is undertaking. It’s also possible that no further changes to the Game Pass strategy will be made, and normal service will resume, after Sharma’s team has conducted a review.
This story is notable in a couple of ways, however. First is that Sharma has already shifted Game Pass strategy, cutting prices and axing new Call of Duty games from the service. This was seen as a sensible move in restoring viability to both the Game Pass and Call of Duty businesses. But, as I noted at the time, it posed larger existential questions about the point of Game Pass, as well as the point of Xbox’s studio acquisition spree. The latter seems to be getting its answer in the depressing form of the expected layoffs and studio closures.
Interest has understandably focused on these macro questions about Microsoft’s strategy and the fate of its first-party studios. But this latest report hints at wider repercussions at a much smaller scale. While Game Pass is sold on its big “day one” first-party titles, its schedule of new games is filled by dozens of smaller deals with (mostly) indie studios. These deals furnish the studios with reliable funding, subscribers with a steady stream of new games to play, and Xbox with indie cred. They have been a valuable life-raft for a sizable sector of the industry for years, and have helped fund the development of many instant classics, from Unpacking to Clair Obscur: Expedition 33.
If Sharma’s team decides these indie signings aren’t moving the needle enough for Game Pass — or just that Game Pass’ volume of new games is too high, and needs to be dialed down — then things will start to look very different, both for Xbox subscribers, and for indie developers looking for a safe port of call in a storm.
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