Arkane Founder Slams Game Pass as Unsustainable Amid Xbox Layoffs

Following recent layoffs at Xbox, Raphael Colantonio, founder of Microsoft-owned Arkane Studios, has criticized Game Pass, labeling its subscription model as “unsustainable.”

Colantonio, who established Arkane Studios, known for Dishonored and Prey, and later founded WolfEye Studios behind Weird West, took to social media, questioning: “Why is the industry silent on the obvious issue? Cough Game Pass.”

When pressed to elaborate on Game Pass, which featured Weird West as a day-one release in March 2022, Colantonio stated: “Game Pass is an unsustainable model that’s been harming the industry for years, propped up by Microsoft’s vast resources. Reality will eventually catch up. It can’t coexist with other models—it either dominates or collapses.”

Colantonio’s remarks ignited a heated debate about Game Pass’s impact on the industry and consumers. Microsoft’s subscription service has been polarizing: some call it the downfall of gaming, while others see it as a lifeline for smaller developers benefiting from Microsoft’s payments to feature their titles. During the Xbox FTC trial over Microsoft’s $69 billion acquisition of Activision Blizzard, former PlayStation head Jim Ryan claimed that “every publisher” he spoke to despised Game Pass, calling it “value destructive” and noting Microsoft’s significant financial losses.

In 2021, Xbox head Phil Spencer refuted critics, asserting: “Some claim we’re burning cash for a future payoff. Not true. Game Pass is highly sustainable and growing.”

Fast forward to today, after layoffs led to the cancellation of projects like Rare’s Everwild, the Perfect Dark reboot, and an unannounced MMO from The Elder Scrolls Online team, questions linger about Game Pass’s viability.

Colantonio’s views found support among industry figures, including a former Epic Games business development VP. Michael Douse, publishing director at Larian, the studio behind Baldur’s Gate 3, expressed concerns about the model’s reliance on “infinite money,” noting it’s a key reason many avoid adopting it. “It never made economic sense,” Douse said.

(Notably, Baldur’s Gate 3 has not launched on Game Pass or PlayStation Plus.)

Colantonio mocked Microsoft’s claim that Game Pass doesn’t harm game sales, pointing to later admissions proving otherwise.

Douse praised Sony’s approach, which delays first-party titles on PlayStation Plus. “Sony’s lifecycle management is smarter,” he said, noting that while Ghost of Yotei won’t launch on PS Plus, Call of Duty: Black Ops 7 will be a day-one Game Pass title.

“Game Pass can only coexist as a back-catalog service without damaging the industry,” Colantonio concluded.

While reports suggest Microsoft’s layoffs stem from its pivot to AI rather than gaming struggles, Colantonio dismissed this as “an excuse.”

He argued, “The numbers don’t add up for most publishers, developers, or even Xbox once the investment slows.”

When asked why Microsoft persists with Game Pass despite its alleged unsustainability, Colantonio explained that it’s still in a “customer acquisition phase,” banking on future subscription revenue to offset costs. He highlighted Microsoft’s massive spending on acquisitions like ZeniMax and Activision Blizzard, which he claims is masked in financial reports through amortization.

For gamers, Game Pass offers unmatched value, providing access to a vast library, including day-one releases like Call of Duty, at a fraction of individual purchase costs. Yet, Colantonio warned that this “too-good-to-be-true” deal could backfire.

“Once Microsoft dominates, game quality may decline, and subscription prices could spike,” he predicted. “Gamers love it now, but the long-term impact on the industry could hurt everyone.”

Microsoft remains tight-lipped on Game Pass’s financial performance. Its latest report (for the quarter ending March 31, 2025) noted an 8% year-over-year growth in Xbox content and services, partly driven by Game Pass, with PC Game Pass revenue up 45%. Subscriber numbers and total revenue, however, remain undisclosed.

In an April interview with Variety, Xbox chief Phil Spencer described Game Pass as “a healthy option for some,” but not universal. “If you play just a couple of games a year, buying them outright makes more sense,” he said, emphasizing that all Game Pass titles are available for purchase.

“Our growth is strongest in PC and Cloud,” Spencer added. “Console remains solid, but it’s not the fastest-growing segment. Game Pass is part of our strategy to reach new players, not the only path.”