Yeah for all the hype about it being the "best deal in gaming ZOMG" Game Pass always sounded unsustainable.

It has ultimately failed to be a system seller, and it has trained the Xbox userbase not to actually buy games, which gives devs less incentive to release their software on the platform.

I understand it's a popular time to dog pile Xbox, deservedly so for many reasons, but it should be important to note this is their opinion, not a fact the service is unsustainable. There is not a single piece of evidence layoffs are connected to Game Pass. 

Way less 3rd party games are skipping Xbox than any previous generation. Franchises that were never on Xbox or had sparse releases are coming to the platform fully like Persona (thanks to Game Pass). Helldivers 2 is even coming to Xbox and has a good chance to be a top 10 seller on Xbox by the end of the year. 

It's not just one dev, a lot of people have voiced concern over Game Pass, from Larian's Michael Douse, to Jumpship's Dino Patti.

MS themselves have admitted in the Activision merger case that Game Pass cannibalizes sales: https://www.ign.com/articles/microsoft-admits-game-pass-cannibalizes-sales

Who's stupid idea was Game Pass anyway?!!

There are also mang devs who have praised Game Pass. More than any concerned voices. 

I'm not saying Game Pass doesn't cannibalize sales, it obviously does depending on the game, but that is the trade off for devs getting a paycheck to put their games on the service. 

What does this have to do with Xbox's layoffs? 

I mean, the fact they're shutting down studio after studio and laying off thousands of thousands of workers doesn't suggest that their business model is sustainable.

Either that or it's so their CEO can afford a golden toilet or some other frivolous piece of shit.

These 9000 layoffs were global wide across the entire company. If it was only Xbox, I would agree, but it wasn't. Most of these layoffs were in departments outside of gaming. Xbox just had it's best quarter in gaming and was profitable. We already know MS is investing heavily into AI and these layoffs are happening the same time this is happening. We know MS wants to save money with AI by cutting jobs. This was always going to happen, no matter how successful Xbox was. 

Many of the layoffs were at Xbox; the Initiative shut down, half of Turn 10 gone, Blizzard, High Moon, Compulsion, Undead Labs, etc.

If Gamepass were really so amazing and successful, there wouldn't be so many devs on the chopping block, they would have cut jobs elsewhere.

Both :/



https://www.pcgamer.com/gaming-industry/xbox-bet-that-game-pass-would-be-the-future-of-gaming-and-were-all-paying-for-it/

By all appearances, 2025 was going to be the year Xbox turned things around. Doom: The Dark Ages, no less than three new games from Obsidian Entertainment, Indiana Jones on PS5, another post-acquisition Call of Duty, and the absolute whopper of The Elder Scrolls 4: Oblivion Remastered. After two years of mass layoffs and studio closures, it seemed like things had calmed down.

Nope: Last week's layoffs of 9,100 people company-wide at Microsoft, with a chunk of those at Xbox, joined the layoffs of 6,000 employees in May. With the 10,000 laid off at the beginning of 2023 and 2,500 after the Activision Blizzard acquisition went through last year, that's 27,600 lives upended by Microsoft in two and a half years.

Some obvious questions arise from this destructiveness. Why did Microsoft gobble up so many studios only to cancel their apparently promising games, like the Blizzard survival game that employees were hyped about, or the ZeniMax MMO that even Microsoft Gaming head Phil Spencer himself reportedly liked? And why should the employees of a company making billions in profit have to be in constant fear that they're next on the chopping block? Microsoft CEO Satya Nadella's executive compensation rose 63% in 2024 to $79 million.


....


After so much talk about its commitment to gaming, it feels clear now that Xbox is just a side project for the mammoth corporation, which would prefer to bet billions on AI so it doesn't lose clients like the Israeli military (however many employees protest its involvement in the massacre of Gazans, which has also landed it on the BDS embargo list).

But that doesn't entirely explain why Microsoft is cancelling games and laying off dev teams at the same time as it's boasting about having "more players, games, and gaming hours than ever before." Our best hypothesis for that apparent contradiction: Microsoft's acquisitions were all about feeding Game Pass, and as successful as the subscription service has been, it hasn't turned out to be the gold mine it hoped for.

According to discovery documents during the FTC's challenge to the Activision Blizzard merger, Microsoft had a goal of over 100 million Game Pass subscribers by 2030. Game Pass currently boasts north of 35 million subscribers after eight years of existence⁠, with five more to go until the 2030 deadline. If that initial goal still stands, we can probably expect many more mass layoffs in the future.


....


Game Pass is undeniably a convenient, economical way for players to access a large catalogue of games, and the service saw rapid adoption. Intuitively, though, it's another force (like Steam sales) driving down the perceived value of games, and Game Pass uniquely harms their retail success⁠—would you rather buy Avowed for $70, or get it through PC Game Pass for $12/month?

The math works if Microsoft keeps getting new Game Pass subscribers, who are enticed to the service with the constant addition of new games. And from the outside, it does appear to be working—Windows Central reported in April that PC Game Pass revenue was up 45%—but Microsoft apparently wants more. Something is clearly very wrong if success continues to result in these mass layoffs, studio closures, and project cancellations.

What's especially worrying is that this should have been a particularly great year for the service, the likes it may not see again for some time, buoyed as it was by the first post-merger Call of Duty on Game Pass. I have my doubts that even an Infinity Ward entry will cause a similar stir, The Elder Scrolls 6 ain't walking through that door anytime soon, and Xbox has committed to starving itself of fuel for the Game Pass engine with every layoff and studio closure. The enduring legacy of Xbox's explosive late '10s and early '20s expansion, buying up so many beloved studios, appears to be a massive injection of misery into gaming as an industry and hobby.



Also keep in mind, revenue up doesn't mean it's sustainable. How much up are the costs... 

And 35 million subscribers is still less than half of the user base MS had with XBox 360, after 8 years, a full generation.