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
