Xbox is facing intense scrutiny following a difficult week marked by layoffs and studio closures under CEO Asha Sharma. As the company navigates this turbulent period, questions regarding the long-term viability of Xbox Game Pass have moved to the forefront, with prominent industry figures offering harsh assessments of the service's current trajectory.
Thomas Mahler, CEO of Moon Studios—the developer behind Ori and No Rest for the Wicked—recently offered a candid post-mortem on the platform. Writing on social media, Mahler suggested that the fundamental issue with Game Pass is its lack of a compelling library. "The Game Pass strategy could've worked if people would've shown up for it," Mahler stated. "Problem is they didn't, and the software catalog was just nowhere near good enough to make people happily pay the subscription every month."
Comparing Game Pass to Streaming Services
Mahler drew a direct comparison between the gaming subscription model and the film industry, noting that users maintain subscriptions for platforms like HBO specifically for high-caliber, "must-watch" content. According to Mahler, the games industry operates differently because players place a high premium on new releases. When that new content fails to match the quality of legacy titles, the subscription model struggles to retain value.
"I'll happily pay my HBO sub because HBO has amazing content that I want to watch," Mahler explained. "But with games, 'NEW' for some reason is very, very important to players. And if your new content doesn't even remotely match the quality of the old content, you've got a problem."
The Search for 'Cultural Events'
The critique extends to the output of Xbox’s first-party studios. Mahler argued that Xbox has failed to produce "smash hits" or "cultural events" that would drive consistent interest. He pointed to the lack of Xbox exclusives nominated for Game of the Year since 2010, suggesting that recent first-party titles, including Starfield, have not met the high quality bar required to anchor a subscription service.
Mahler went as far as to liken the incentive structure of the current model to communism, suggesting that without a strong drive to "go the extra mile," quality suffers. "If you don't give people a strong incentive to roll up their sleeves and go the extra mile, they won't," he wrote.
However, industry voices are divided on this assessment. While some share Mahler's frustrations, others point to the internal culture at Microsoft. Journalist Jason Schreier noted that producing high-quality art is difficult when developers operate under the constant "fear of layoffs and turbulence and cancellations and shutdowns."
Furthermore, the strategy of placing tentpole exclusives on Game Pass day-and-date has faced its own complications. As seen with Call of Duty: Black Ops 6, this approach risks cannibalizing premium sales, which can place additional financial pressure on studios. With historic teams like Double Fine and Ninja Theory facing uncertain futures, the debate over whether the issue lies in the Game Pass catalog or deeper systemic problems within Xbox’s first-party machine remains a point of contention for developers and fans alike.