Hot on the heels of former Bethesda executive Pete Hines questioning Xbox Game Pass as a business strategy, a former Microsoft executive has backed the comments, insisting Microsoft’s subscription service creates “weird inner tensions.”
Last week, Bethesda Softworks’ former senior vice president of global marketing and communications, Pete Hines, said gaming subscription services like Xbox Game Pass are “worth jack s***” if the game developers who create content for them are not properly supported.
“Subscriptions have become the new four letter word, right? You can’t buy a product anymore,” Hines said. “When you talk about a subscription that relies on content, if you don’t figure out how to balance the needs of the service and the people running the service with the people who are providing the content – without which your subscription is worth jack s*** – then you have a real problem.”
Over on LinkedIn, former PlayStation exec Shawn Layden expressed support for Hines’ comment, saying it “hits this nail right on the head.”
“The question is not, ‘Is the service profitable for the platform,’ Layden, a vocal critic of video game subscription services, added. “‘Is it healthy and helpful for the developer’ is what we need to ask.”
Layden’s comment prompted a comment from former Xbox Game Studios VP Shannon Loftis (spotted by TweakTown), who provided some insight that benefits from coming from a former Microsoft employee.
Loftis, who retired from Microsoft in 2022 after 29 years at the company, served as a manager on several Xbox projects, including Fable, Viva Piñata, Banjo-Kazooie, and Age of Empires.
“As a longtime first-party Xbox developer, I can attest that Pete is correct,” Loftis said. “While GP can claim a few victories with games that otherwise would have sunk beneath the waves (Human Fall Flat, e.g.), the majority of game adoption on [Game Pass] comes at the expense of retail revenue, unless the game is engineered from the ground up for post-release monetization. I could (and may someday) write pages on the weird inner tensions this creates.”
The suggestion Game Pass comes at the expense of retail revenue is a long-standing criticism of the subscription service, one Microsoft was forced to admit in 2023. There has been much debate recently over the profitability of Xbox Game Pass, which Microsoft itself has said makes money even when factoring in the development cost of the games that launch within it, and the lost sales of first-party games which people no longer need to pay individually for.
Regardless, Xbox Game Pass remains a huge profit driver for Microsoft, which said in June that the subscription service had reached a new annual record of nearly $5 billion in revenue for the first time, following the launches of The Elder Scrolls: Oblivion: Remastered, Doom: The Dark Ages, and Indiana Jones and the Great Circle.
In July, hot on the heels of layoffs that swept through Xbox, the founder of Microsoft-owned Arkane Studios hit out at Game Pass, whose subscription model he called “unsustainable.” Raphael Colantonio, who founded the Dishonored and Prey developer and served as its president before leaving in 2017 to start 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 asked to expand on his thoughts on Game Pass, which Weird West launched straight into as a day one title in March 2022, Colantonio said: “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.”
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, they all hated Game Pass “because it is value destructive.” He also said 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.”
Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can reach Wesley at [email protected] or confidentially at [email protected].
