Game Pass will “either kill everyone else, or give up”, says Dishonored and Prey dev Arkane founder

Seemingly in response to the latest round of layoffs at Microsoft and Xbox, Arkane founder and WolfEye president Raphael Colantonio has taken to socials to ask why no-one is talking about “the elephant in the room”, Xbox Game Pass.

Microsoft’s subscription service is “an unsustainable model that has been increasingly damaging the industry for a decade,” Colantonio wrote, “subsidised by MS’s ‘infinite money’. I don’t think GP can co-exist with other models, they’ll either kill everyone else, or give up”. Cheers, IGN.

Colantonio then brought up Xbox’s public denial and later admission – in documents related to the Activision Blizzard merger – that Game Pass impacts direct game sales. He also suggested that Microsoft’s stated goal of cutting costs to invest heavily in AI was a “bs excuse” for the layoffs.

It’s worth noting here that Microsoft laid off around 2,500 workers across its gaming division in 2024, with more across the company this year, prior to the current round. It seems unlikely investments into AI have played no part in numbers like this. A recent Wired report (paywalled) implies significant correlation between studios adopting AI tools for specific disciplines before laying off workers that specialise in those areas, as was the case with ActiBlizz laying off artists after putting up Call Of Duty GenAI cosmetics for sale.

According to Colantonio’s own math, however, the funds sunk into Game Pass are still significant. “When a deal is too good, there is a reason,” he wrote. “They are still not profitable after 8 years, they are still in customer acquisition phase, hoping one day the subscription revenue will be > to the investments ($100B in acquisitions+licensing+dev costs). Do the math, they have 35m subscribers, including the $1.”

As IGN note, Xbox don’t report on the financials of Game Pass in detail, though they have shared that “Xbox content and services grew 8% year-over-year, which was in part due to growth in Xbox Game Pass. PC Game Pass revenue increased 45% year-over-year”.

“What *might* happen once MS has won: the games will start to suck and your sub will go up,” Colantonio wrote. “Why? Because the current amazing deal you have is subsided by MS bleeding money into it with the hope they’ll kill the competition”.

This line of argument echoes comments made by former Xbox exec Ed Fries on a podcast in 2022. “Game Pass scares me because there’s a somewhat analogous thing called Spotify that was created for the music business,” Fries said. “So we have to be careful we don’t create the same system in the game business. These markets are more fragile than people realise.”

Josh Herrman of The Intelligencer described Spotify’s 2022 financials as a “weird, loser-take-all outcome — which happens from time to time in tech, where dominant firms are allowed to bleed money for years in pursuit of long-term sector domination”. The music streaming giant has been long-criticised for giving artists the raw end of the deal, leaving them to rely on touring and merch sales for an income.

Whether this translates directly to games is contested, however. Here’s a 2025 study for the International Journal of Research in Marketing arguing that Game Pass and PS Plus have “limited impact on video game revenue (contrary to the cannibalizing effects observed in the music, movie and TV industry).”

“Only the gamers like it because the offer is too good to be true,” said Colantonio, “but eventually even gamers will hate it when they realize the effects on the games.”