‘I Much Prefer PS Plus’ Lifecycle Management Strategy’: Devs Weigh in on Xbox Game Pass Impact

Microsoft has terminated over 9,000 positions this week, particularly affecting Xbox. Several projects were halted, one studio was shuttered, and numerous individuals are now unemployed.

In the wake of the upheaval, numerous individuals are seeking explanations. A report by the Seattle Times claims that the trillion-dollar tech conglomerate is aiming to liberate funds to boost its investments in AI.

The Redmond-based company has heavily funded Sam Altman’s OpenAI, which has subsequently led to a push for its Copilot product among consumers.

However, regarding Xbox, former Arkane Studios founder Raphael Colantonio suggests there could be an alternative culprit.

“Why is no one addressing the obvious issue? Cough cough Game Pass,” he remarked somewhat subtly on X (or Twitter).

This ignited an intriguing dialogue on social media, with several prominent developers sharing their insights on Microsoft’s disruptive approach.

When prompted to elaborate on his views, Colantonio responded:

“I believe Game Pass is an untenable model that has been progressively harming the industry for a decade, subsidised by Microsoft’s ‘infinite funds’, but at some point, reality must set in. I don’t think Game Pass can exist alongside other models; it will either eliminate its competition or fold.”

In reaction to Colantonio’s remarks, Larian’s Michael Douse contended “the infinite money concept never made much sense,” to which Raphael replied:

“I concur, and I’m tired of all the nonsense they initially fed us, like ‘Don’t worry, it doesn’t affect sales,’ only to confess years later that it absolutely does. ‘No kidding it does! Seriously?’

It is worth mentioning that Colantonio’s Weird West, produced by his new studio WolfEye, was indeed part of Game Pass in 2022, so he likely has a solid understanding of the advantages and disadvantages of the business model.

Both Douse and Colantonio ultimately acknowledged that Sony’s method of managing subscriptions, introducing games later in their lifecycle, is a more robust strategy.

Douse mentioned:

“The financials never added up, but I do recognize that for smaller teams with new or riskier intellectual properties, it assisted in reducing risk. I much prefer Sony’s ‘lifecycle management’ approach.”

Sony’s former CEO Jim Ryan faced significant backlash earlier in the generation for opposing the Game Pass business model. At that time, many speculated that PS5 would falter if PS Plus didn’t begin incorporating first-party titles at launch.

Back then, he stated:

“We have previously discussed this – we will not proceed down the path of including new release titles within a subscription model. The development costs for these titles reach many millions of dollars, well over $100 million. We simply don’t view that as viable.”

Certainly, there’s a much grander narrative at play, but it is fascinating to see the financial aspects of Game Pass finally brought into the spotlight after years of dismissive comments from Microsoft and the media.

One French analyst reported this week that in Europe less than 5% of The Elder Scrolls 4: Oblivion Remastered’s sales occurred on Xbox platforms. This clearly indicates the declining market share of Microsoft’s ecosystem in the region, as well as the broader consequences of Game Pass on full-price software revenues.

Admittedly, we still lack sufficient data to determine the full extent of this business model’s effects on Xbox’s financial health, but it is becoming increasingly evident that Sony’s more cautious approach to subscriptions has served its interests well and ultimately was the correct decision.