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 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.”
Colantonio’s comment sparked a vociferous debate about the pros and cons of Game Pass in industry terms as well as for the customer. Microsoft’s subscription service has been called many things over the years: the death of the video game industry; the savior of smaller developers who benefit greatly from payments made by Microsoft to secure their games; and everything 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, 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.”
That was four years ago. What about now, in the wake of cuts that 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 comments were backed by a number of industry peers, including the former VP of biz dev at Epic Games. Michael Douse, publishing director at Baldur’s Gate 3 developer Larian, said that the biggest concern right now revolves around what happens 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 worth noting that Baldur’s Gate 3 has so far not launched in Game Pass or PlayStation Plus.)
Colantonio then ridiculed Microsoft’s insistence that launching games into Game Pass did not impact sales, only to later admit the contrary.
Douse responded to to say he prefers the Sony way of doing things. Sony’s PlayStation Plus policy is to keep first-party games off the subscription service at launch, only adding them some time later. That’s why you won’t see this year’s Sony’s Ghost of Yotei launch straight into PS Plus, but you will see 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 said. “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.
Xbox Games Series Tier List
Xbox Games Series Tier List
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, but 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 also asked why Microsoft would continue to push Game Pass if it were unsustainable, even now, eight years after it launched. He responded to say that Game Pass isn’t profitable, Microsoft is still in the “customer acquisition phase”, and the company hopes that one day, subscription revenue will make its significant investment pay off.
Colantonio explained that Game Pass on its own cannot be considered profitable because you need to factor in the billions of dollars Microsoft has spent acquiring content for the subscription service, and he includes Bethesda owner 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 incredible deal for the gamer that lets subscribers dip in and out of a long list of games for a fraction of the cost of buying those games standalone. Game Pass is often said to be too good to be true because of how cheap it is relative to what it offers. When you throw in every game Microsoft has on its books as a day one Game Pass launch (Call of Duty included), the deal feels even better.
For Colantonio, though, 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 does not report on the success of Game Pass either way in financial terms. Indeed, its reporting on its gaming business is vague at best. In its last financial report (for the quarter ending March 31, 2025), Microsoft said Xbox content and services grew 8% year-over-year, which was in part due to growth in Xbox Game Pass. PC Game Pass revenue increased 45% year-over-year. But we don’t have an updated figure for how many subscribers Game Pass has, nor how much money it brings in.
In an April interview with Variety, Microsoft gaming boss Phil Spencer was asked how he views Game Pass’s ongoing role in the larger Xbox business. Spencer replied to say he thinks about Game Pass as “a healthy option for certain people,” but 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 reach Wesley at [email protected] or confidentially at [email protected].
