XBOX: Microsoft suspends agreements with external producers for Game Pass, reports from developers indicate
Recent information indicates that Microsoft has paused the signing of new contracts with independent studios to include titles in its subscription service, Game Pass. Reports from developers who were in advanced negotiations indicate that the processes were interrupted.
Developers report suspension of negotiations for Game Pass
The former director of sales and business development at Raw Fury, Fernando Rizo, currently a partner at the Caboodle consultancy, clarified his observations in a podcast. He said he had spoken to several developers whose contracts for Game Pass were in different stages of negotiation, and who were informed about the suspension of those agreements. Rizo believes that the stoppage does not mean the end of the service, but rather a period of strategic adjustment for the new Xbox CEO, seeking to align the team before resuming partnerships.
Beginning of news about interruption of service agreements
Initially, news emerged indicating that Microsoft may have stopped signing new partnerships with third-party game creators for Game Pass. It is assumed that this decision is linked to the restructuring that the Xbox division is currently undergoing. The market is now questioning whether investment in new projects will return after this period of reorganization.
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The information was released by Fernando Rizo on his podcast “The Business of Video Games”. During a business fair in Italy, Rizo heard that “a lot of people who were quoted to close deals with Game Pass — that is, nothing had been signed yet, but negotiations were at an advanced stage — were completely misled.”
He reinforces that, in his assessment, Game Pass will not be discontinued, considering the importance that the new leadership has attributed to the service. Rizo suggests that the company is on pause, dedicating itself to assessing the situation. He expressed the impression that recent partnerships, like the one struck by his company Caboodle at the beginning of the year, might have been one of the last before the suspension.
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Xbox strategy amid market challenges
The Xbox division has been under a “restructuring” process since February, when Asha Sharma took over leadership, succeeding Phil Spencer and Sarah Bond. Among the first measures of his management, there was a notable reduction in the price of Game Pass, specifically the Ultimate plan, which went from £23 to £17 per month. However, the Call of Duty game is no longer included in the catalog since its launch to subscribers.
Despite the changes, Game Pass remains an essential pillar for Xbox’s business. The Xbox Summer Showcase, held in June, repeatedly highlighted the availability of new games featured in the service’s catalog. As Xbox looks to re-prioritize exclusive titles, strategic acquisitions for Game Pass could become a big differentiator.
However, Xbox faces pressure to return to profitability after substantial investments in acquiring game studios, such as its purchase of Activision Blizzard for a staggering $68.7 billion. The question arises whether maintaining payment for third-party games on Game Pass is financially sustainable or whether it would be more advantageous to focus the catalog on access to games owned by Microsoft itself.
Additionally, the company announced a considerable increase in the prices of its Xbox Series S and Xbox Series X consoles. The new prices will come into effect from August 1st.
