Arkane Studios Founder Calls Game Pass ‘Unsustainable’ After Xbox Layoffs

The founder of Arkane Studios, a subsidiary of Microsoft-owned ZeniMax, has called Game Pass “unsustainable” in the wake of widespread layoffs at Xbox. Raphael Colantonio, who founded the studio behind games such as Dishonored and Prey and currently heads Wolfeye Studios, called Microsoft’s game subscription service “the elephant in the room” that hurts sales of Xbox games.

Xbox Game Pass Called ‘Unsustainable’

“Why is no-one talking about the elephant in the room? Cough cough (Gamepass),” Colantonio said on X (formerly Twitter) Saturday. The former Arkane president, who left the company in 2017, criticised the Game Pass model, which has been the centrepiece of Microsoft’s gaming strategy for years, after the latest round of cuts at Xbox saw studio closures, project cancellations and layoffs.

“I think Gamepass is an unsustainable model that has been increasingly damaging the industry for a decade, subsidized by MS’s “infinite money”, but at some point reality has to hit,” Colantonio added in the replies to his post. “I don’t think GP can co-exist with other models, they’ll either kill everyone else, or give up.”

He claimed the Game Pass economic model was flawed and pointed out that releasing titles day one on Game Pass impacted sales. All first-party Microsoft games are launched day one on the subscription service, allowing members to play new titles at no additional cost.

The Value of Game Pass

While Game Pass does offer value to gamers, the service has been criticised in the past within the games industry. The service offers visibility to smaller, independent games, but it can end up hurting sales for newly released titles. Back in 2023, while deposing at the US FTC trial over Microsoft’s acquisition of Activision, former PlayStation boss Jim Ryan had claimed that video game publishers unanimously agreed that Xbox Game Pass was “value destructive.”

While being on Game Pass can chew into unit sales of new titles, some games have found commercial success despite launching onto the service day one. Clair Obscur: Expedition 33, the acclaimed turn-based RPG from French developer Sandfall Interactive that launched on April 24, sold over 3.3 million copies in just over a month after release, despite being available on Game Pass.

In April, Rebellion Developments CEO said launching the studio’s action-survival game, Atomfall, on Game Pass had been a huge success. The game, which was released in March, has reached over two million players.

Xbox Layoffs

Last week, Microsoft laid off around four percent of its workforce — over 9,000 employees. The layoffs hit the Xbox division hard, reportedly impacting Candy Crush developer King, Call of Duty makers Raven Software and Sledgehammer Games, Halo Studios, and Forza Motorsport developer Turn10 Studios.

As part of the cuts, Microsoft also cancelled the Perfect Dark reboot and shut down developer The Initiative. Rare’s action-adventure game Everwild was cancelled, too, along with several unannounced projects.

The Seattle Times reported that the latest round of job cuts at Microsoft could represent the company’s efforts to cut costs as its AI spending balloons. The Xbox parent plans to spend more than $80 billion (roughly Rs. 6,87,456 crore) on AI infrastructure in the coming year.