80%
Probable
Xbox CEO Asha Sharma is famously turning the division upside down in an attempt to restore profitability (at the behest of Microsoft CEO Satya Nadella), and that may include cutting Game Pass funding to third-party studios.
Speaking on The Business of Video Games Podcast's Episode 59, Fernando Rizo from Caboodle Games shared information learned by conversing with fellow industry members at the recent First Playable trade show, held earlier this month in Florence, Italy.
According to Rizo, who co-hosts the podcast with Shams Jorjani (CEO of Arrowhead Game Studios, Chairman of the Board at Hooded Horse, and founder of the Almost Ready Games Fund), it appears that Microsoft has essentially stopped funding third-party Game Pass deals, at least for the time being. For his part, Jorjani speculates that this is part of Asha Sharma's big Xbox "reset".
Fernando Rizo: I was at the trade show in Italy, had some nice lunches and dinners with industry colleagues, and word on the street was that loads of people who were in the frame for Game Pass deals....Nothing was inked yet, but the deals were in advanced discussions, and everybody got the rug pulled out from under them. I think what that means is that....I don't think Game Pass is over, given that the new leadership have talked a lot about Game Pass, but I think they're on pause. I think they're figuring it out; that's my reading, anyway. But yeah, for the time being, it seems that way. Like, we just did one at Caboodle earlier in the year and I get the feeling that we were among the last ones.
That's certainly not great news, especially for smaller developers, who have often relied on such deals to get by in the last few years. As for Xbox as a whole, it may be part of the larger division-wide cuts. Veteran analyst Joost van Dreunen posited that Sharma is currently making Xbox smaller by cutting everything deemed unnecessary. That may well include studio closures and/or major layoffs soon, but reducing these expensive third-party deals may be part of the strategy, too.
However, if true, this could also mean that Sharma may start to shift away from Game Pass as the North Star of Xbox's gaming plan. After all, bringing fewer third-party games to the subscription service (and removing some first-party titles at launch, like Call of Duty) is unlikely to increase its appeal to consumers. Microsoft may finally be realizing that Game Pass can only really be a complement to full-game sales, not the main course.
About the author: With over two decades of experience in gaming journalism, Alessio Palumbo has led the gaming vertical at Wccftech since August 2015. He started working at a young age for Italian websites like Everyeye.it, Gamestar.it, Nextgame.it, and Multiplayer.it before kickstarting the indie English-language publication Worlds Factory as its founder and Editor in Chief. In the last decade, he has coordinated the overall output of Wccftech's gaming section, managed PR relations, assigned reviews, produced daily news coverage, edited gaming content as needed, and delivered game reviews. Arguably, his trademark content is the long series of exclusive developer interviews that have been cited by Wikipedia and by the biggest news media and gaming publications. His passion for technology also makes him knowledgeable when it comes to gaming hardware and tech. His favorite genres include RPGs, MMORPGs, and action/adventure games.
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