As the fallout from the Xbox reset continues, one former developer of the Forza Horizon collection has mentioned what we’re seeing with layoffs, studio exits, and recreation cancelations is the outcome of the failure of Game Pass to hit the subscriber numbers Microsoft required to justify its huge spending on content material.
Xbox CEO Asha Sharma has already lower 1,600 workers from Xbox, and plans for one more 1,600 to go over the course of the present monetary yr. 4 studios are confirmed to be leaving Microsoft possession, with one other on its manner. Sharma has known as it the most “important” restructure in Xbox historical past, insisting Microsoft’s gaming enterprise “just isn’t wholesome.”
Talking on MinnMax, Mike Brown, who was inventive director on the vastly profitable Forza Horizon 5 earlier than leaving developer Playground to discovered his personal studio, Maverick Video games, which is ready to launch an open world racer of his personal known as Clutch, mentioned that Xbox Game Pass had failed to hit sufficient subscribers to justify Microsoft’s large spending on content material acquisition. This consists of the eye-watering $69 billion Microsoft splashed out on Name of Responsibility developer Activision Blizzard.
“I feel it is actually unhappy and I feel it is actually, actually unlucky,” Brown started. “They’ve truthfully invested a fortune in the idea of Game Pass as a service, which led to hundreds of groups being acquired, hundreds of video games being funded, hundreds of folks getting jobs, all with a imaginative and prescient of getting common video games touchdown on this service for gamers. I feel the actuality just isn’t sufficient folks have subscribed to it at the costs that they wanted to pay so as to make that enterprise viable.
“And, that’s really simply actually unhappy. As a result of we’re now going to see studios getting shut down or spun off, and hundreds of individuals are going to lose their jobs, and that’s truthfully simply a outcome of a well-meaning, player-focused idea of Xbox Game Pass not fairly touchdown.”
Brown went on to defend Microsoft and Game Pass, praising the idea of the subscription service and the video games that will in any other case not have been made have been it not to have existed.
“It’s simply a actual disgrace,” he continued. “And as a lot as folks level fingers and name totally different folks inside Xbox the villain of the piece, the idea of Game Pass was good. Like, it is a good thought. Let’s have a subscription, make it inexpensive, attempt to get video games to extra folks. We’ll have a actually various choice of video games on there. We’ll get a load of studios concerned. We’ll make some video games that in all probability could not exist in any other case. And if extra folks had subscribed, that makes sufficient cash and it really works, and all of these studios go on and people video games get made once more and people groups will make different video games. Sadly, it didn’t.
“I don’t know the quantity it wanted to hit was, however it by no means reached the quantity that will make a $70 billion acquisition of Activision Blizzard make monetary sense. It’s actually unlucky. We don’t know what the future is simply but, however it’s a reshaping of the enterprise round that, after the first idea didn’t fairly land.”
Xbox Video games Collection Tier Listing
Xbox Video games Collection Tier Listing
Brown’s feedback right here really echo these of Sharma herself. When she introduced the layoffs, Sharma admitted that Game Pass had failed to develop as Microsoft had anticipated.
“Our enterprise right this moment just isn’t wholesome,” Sharma mentioned. “We’re working at margins which can be 3-10x decrease than comparable platform and publishing companies. We entered Gen 9 with a smaller set up base and a greater price construction. To develop, we guess on Game Pass, multi-platform, and a broader portfolio of content material. Whereas these companies have created significant worth, they didn’t develop at the tempo we anticipated. As that occurred, our core enterprise weakened, and we added extra groups, extra funding, and extra time, hoping for a higher final result. And now the business is going through the most extreme {hardware} disaster in its historical past. We should reset Xbox.”
The Wall Street Journal mentioned that Microsoft had anticipated Game Pass subscriptions to hit round 77 million this yr, however it at the moment has solely about 30 million. As revealed throughout the FTC vs Microsoft trial of 2023, Microsoft had hoped for 100 million subscribers by 2030, which appears not possible at this stage.
The precise quantity of subscribers Microsoft had in early 2026 is unclear, however we do know Game Pass had not less than 34 million members as of February 2024. By July 2025, Xbox Game Pass income had reportedly reached almost $5 billion for the first time.
One of the first choices Sharma made after changing former Xbox boss Phil Spencer was to lower the value of Game Pass and pull Name of Responsibility out as a day one title. Sharma lately advised Bloomberg that Xbox had “been in a position to reset Game Pass after an eight-month decline.” “It’s now returned to development and increasing retention,” she added, “and most significantly, we’re beginning to get again to being nearer to our gamers and our group.”
Nonetheless, the future of Game Pass is unclear. Will Microsoft pull its video games out of the subscription as day one launches? Will Bethesda’s The Elder Scrolls 6 launch day one on Game Pass? Will the subsequent mainline Halo recreation? May we see Game Pass change into extra like Sony’s PlayStation Plus, which doesn’t launch first-party video games day one?
In the meantime, Microsoft is doubling down on its largest franchises, which for now means extra Fallout extra shortly.
Wesley is Director, Information at IGN. Discover him on Twitter at @wyp100. You possibly can attain Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.