Microsoft might have hit pause on signing any more third-party Game Pass deals. Presumably it's doing this while restructuring Xbox, as it's reported to be doing, but will it open the cheque book again after?

The news comes from former Raw Fury sales and business development officer Fernando Rizo - now a parter at game commercial advisory company Caboodle - talking on a podcast he co-hosts called The Business of Video Games (episode 59). Rizo was at a trade show in Italy recently and heard that "word on the street was that loads of people who were in the frame for Game Pass deals - ie. nothing was inked yet but the deals were in advanced discussions - everybody got the rug pulled out from under them.

"I don't think Game Pass is over given that the new incoming leadership have talked a lot about Game Pass," Rizo added. "I think they're on pause; I think they're figuring it out - that's my read anyway. For the time being, it seems like Game Pass deals: we just did one at Caboodle earlier in the year and I get the feeling that [we] might have been one of the last ones that did."

Xbox is currently being "reset" by new boss Asha Sharma, who took over in February from Phil Spencer and Sarah Bond. One of her first big moves was to significantly discount Game Pass, most notably dropping the Ultimate tier from £23 a month to £17 - the tradeoff being that Call of Duty would no longer be included from day one.

But Game Pass seems to remain a key part of the business. The Xbox Summer Showcase in June consistently reiterated the Game Pass availability of games being shown, and as Xbox pivots back to exclusivity being important, some strong Game Pass signings could present an alluring attraction.

However, Xbox is also feeling the pressure to return to profitability after spending exorbitant amounts acquiring gaming studios - the biggest among them, Activision Blizzard, for an eye-melting $68.7bn. Perhaps it's too expensive to keep paying out for third-party Game Pass games; maybe it's more cost effective to shrink the net and focus on access to homemade games instead.

Meanwhile, most recently, Xbox substantially increased the price of its Xbox Series S/X consoles. The new prices will come into effect from 1st August.

UPDATE  I contacted Fernando Rizo to see if I could find out more about what he shared on his podcast. In response, Rizo said: "I definitely don't want to oversell what I know - not privy to any internal Microsoft conversations. But I had spoken to a number of devs that had Game Pass deals in various stages of negotiation who were told the deals were on hold. I don't personally think this is the death of Game Pass or anything, probably just a new CEO wanting to get her feet under her desk and everyone aligned on strategy before the Game Pass team starts cutting cheques again."

*Eurogamer

Rumors that Undead Labs may be on the cutting room floor to be shutdown or sold. I'm guessing we'll find out later this week.

Looks like Jez is confirming that Undead Labs is indeed on the chopping block and that Game Pass deals are on hold. God damn it I'm tired of hearing about Amy Hood!!!

"Despite having trailers at the previous two showcases and a well-received alpha test which boasted thousands of sign ups, Microsoft is exploring selling off Undead Labs and potentially cancelling State of Decay 3 if it can't find a buyer for the team. Given that State of Decay 3 is nearly finished, looks spectacular, and has had multiple trailers — this is one of the most self-immolating ideas I've seen of Xbox since I started reporting on it over a decade ago.

The report comes from GamesBeat, which apparently confirms and coincides with information I received over the weekend. Indeed, Undead Labs seems to be among the studios Microsoft is looking to offload or shut down as part of its fiscal year end.

I'm told the cuts are being driven by Microsoft corporate CFO Amy Hood, who has demanded a variety of savings at Xbox to offset losses ... which were also a result of her previous 30% margin demands.

Microsoft has frozen discussions with third-parties for Xbox Game Pass deals (for now), and is exploring a range of studio closures, which could see Double Fine, Ninja Theory, Compulsion, and others shuttered if Microsoft can't find a buyer or pathway for them to go independent."

Xbox is weighing up canceling its Marvel's Blade game and shuttering Arkane.

Microsoft could shut at least five studios as part of big Xbox layoffs starting next week Sources familiar with Microsoft’s plans tell The Verge that the layoffs will lead to studio closures or spinoffs, potential mergers of studios, and canceled games.

Sources tell me Microsoft wants to cancel Blade as part of a wave of cost cuts and job losses that are planned for the company’s Xbox gaming division.

Blade's internal ship date for the game slipped to late 2027, and it’s also running over budget. While Microsoft is weighing canceling Blade, it’s also exploring options to sell Arkane Studios. These layoffs are due to start on July 6th, according to sources, and will hit most parts of Xbox. Rumors have suggested there could be at least 1,000 job losses, and if Microsoft goes ahead with five studio closures, then that’s at least 500 employees impacted before the wider cuts.

Looks like Xbox has canceled their partnership with IO Interactive on Project Fantasy.

The majority of Xbox will likely face at least some layoffs. 

From the reports here is what we've heard:

• Almost certainly closed or sold off:
• • Ninja Theory
  • Double Fine
  • Compulsion Games 
• Possibly closed or sold off:
• • Undead Labs
  • Arkane Lyon

Pretty sure that 2nd party deal died years ago. IO Interactive announced that was a multiplatform game like 2 or 3 years ago now. More likely this is like an Epic exclusivity deal on PC that fell through or something, or a day one Gamepass deal on it, considering there are reports that Xbox has frozen all Gamepass discussions pending the full decision on what will be cut and what will be kept at Xbox.

Nope. According to Jason Schreier this was Xbox that was funding the game. 

Tom Warren just confirmed that Arkane Lyon is among the studios being considered to be sold off or closed, specifically a sell-off for Arkane, with Xbox considering cancelling Marvel's Blade as part of it's cost cutting initiative. It is among 5 studios he has heard from his sources are being considered for sale or closure, which are Arkane, Ninja Theory, Undead Labs, Compulsion, and Double Fine.

The real surprising one to me there though is not Arkane though, afterall Arkane Lyon's last 3 games each performed under expectations (Deathloop, Wolfenstein Youngblood, and Dishonored: Death of the Outsider being the 3 that underperformed), and their last game was 5 years ago with Marvel's Blade reportedly 2028 at the earliest. Undead Labs is the surprising one to me. Yes, they have had major behind the scenes issues on State of Decay 3, there were like 2 years, 2021 and 2022 as I recall, where they got virtually nothing done according to behind the scenes reports from Kotaku. But they seem to be running smoother now, and State of Decay 3 is just a year off from release. Better at this point to let them finish it, recoup some of the development costs, and then decide whether or not to close them based on whether or not they fully recoup the development costs and start to turn a profit on the game. State of Decay isn't exactly a small series afterall, the 2nd game hit 10m players in 3 years.

I agree about Undead Labs. The other 4 is far less surprising. They could have Undead Labs release State of Decay 3 earlier than planned in "early access" and either sell it for say $10 less than when 1.0 version comes out or give people who buy it in early access get extra content.