Xbox Game Pass is experiencing one of its most delicate moments since its launch eight years ago, and the question that haunts the entire industry is whether the service can survive under its own weight.

The new CEO of Xbox, Asha Sharma, inherited a business that never took off as promised, and now faces the task of reinventing it without killing the goose that lays the golden eggs that represents Microsoft's game catalog.

Sharma acknowledges that the model does not work

In an internal memo sent to Xbox employees, Sharma was quite honest in admitting that Game Pass “has become too expensive for gamers” following price hikes over the past two years. The executive did not hold anything back and acknowledged that “the current model is not the definitive one,” suggesting that fundamental changes are coming both in prices and in the way the service is related to the game catalog.

As part of that turn, Sharma decided to partially reverse the latest price increase for Ultimate memberships, a move designed to win back dissatisfied subscribers and, in the process, tempt new users who saw the service as unattractive compared to its cost.

The move was not free, since in exchange Xbox accepted that the next Call of Duty titles will no longer arrive on the service on the same day of their release, a change that marks a significant break in the original philosophy of Game Pass.

Mike Brown puts his finger on the sore spot

Sharma's words coincide with what voices within the gaming industry itself had been warning about. Mike Brown, former director of Forza Horizon 5 at Playground Games, spoke without filters in an interview with the MinnMax channel about the financial reality of the service. According to Brown, who now leads the development of the Clutch game at the Maverick Games studio, the underlying problem is that Game Pass never managed to add the necessary number of subscribers at the prices needed for the business to be profitable.

The director was especially crude when describing the consequences of that failed bet. He explained that Microsoft invested a fortune in the idea, which led to buying studios, financing projects and creating jobs with the expectation of constantly feeding the catalog, but reality ended up showing that the numbers simply did not add up. Brown even called the situation “sad,” noting that studio closures, team reassignments, and layoffs are a direct consequence of an initiative that, while well-intentioned and focused on players, failed to attract enough audiences. Another industry analysis confirms that Game Pass has around 30 million subscribers, a figure far from the goal of 100 million that Xbox once dreamed of and which makes it practically impossible for the service to reach the scale necessary to be truly lucrative.

Layoffs, studio sales and an uncertain outlook

The backdrop to this entire crisis is completed with Microsoft's announcement of laying off almost 3,200 employees and with the sale of some of the studios that Xbox had bought in recent years in its race to fatten the Game Pass catalog. That combination of cuts, sales and price adjustments makes it clear that the aggressive growth strategy that characterized Xbox for almost a decade has reached a breaking point. Even with all this, Brown maintains a curiously optimistic stance about the original idea behind the service, since he believes that Game Pass can work if it is offered at reasonable prices, because it allowed the financing of games that probably would never have existed without that support.

Sharma, for his part, has insisted that the goal now is to get more players to value the service, stay subscribed for longer and be satisfied with what they receive, instead of continuing to focus solely on growth at all costs. The big question is whether these adjustments arrive in time to stop the bleeding or if Game Pass, as we knew it, is already condemned to transform into something completely different in the coming years.

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