The recent Xbox reset has sent shockwaves through the gaming industry, with 1,600 staff cut from Xbox and plans for another 1,600 layoffs over the course of the current financial year. Four studios have confirmed their departure from Microsoft ownership, with another on its way out. This significant restructuring of Xbox’s business has left many wondering what went wrong. According to Mike Brown, former creative director of Forza Horizon 5, the failure of Game Pass to hit the subscriber numbers Microsoft required to justify its enormous spending on content acquisition is to blame.
Brown, who left developer Playground to found his own studio, Maverick Games, which is set to release an open-world racer called Clutch, believes that Game Pass was a well-intentioned but ultimately flawed concept. ‘I think it’s really sad and I think it’s really, really unfortunate,’ Brown said. ‘They’ve honestly invested a fortune in the concept of Game Pass as a service, which led to loads of teams being acquired, loads of games being funded, loads of people getting jobs, all with a vision of getting regular games landing in this service for players. I think the reality is not enough people have subscribed to it at the prices that they needed to pay in order to make that business viable.’
Brown’s comments echo those of Xbox CEO Asha Sharma, who has admitted that Game Pass failed to grow as Microsoft had expected. ‘Our business today is not healthy,’ Sharma said. ‘We are operating at margins that are 3-10x lower than comparable platform and publishing businesses. We entered Gen 9 with a smaller install base and a higher cost structure. To grow, we bet on Game Pass, multi-platform, and a broader portfolio of content. While those businesses have created meaningful value, they did not grow at the pace we expected.’
According to The Wall Street Journal, Microsoft had expected Game Pass subscriptions to hit around 77 million this year, but it currently has only about 30 million. As revealed during the FTC vs Microsoft trial of 2023, Microsoft had hoped for 100 million subscribers by 2030, which seems very unlikely at this stage. The exact number of subscribers Microsoft had in early 2026 is unclear, but we do know Game Pass had at least 34 million members as of February 2024. By July 2025, Xbox Game Pass revenue had reportedly reached nearly $5 billion for the first time.
Despite the challenges, Brown remains a fan of the Game Pass concept. ‘It’s just a real shame,’ he said. ‘And as much as people point fingers and call different people within Xbox the villain of the piece, the concept of Game Pass was good. Like, it’s a good idea. Let’s have a subscription, make it affordable, try and get games to more people. We’ll have a really diverse selection of games on there. We’ll get a load of studios involved. We’ll make some games that probably couldn’t exist otherwise.’
Brown’s comments also highlight the uncertainty surrounding the future of Game Pass. Will Microsoft pull its games out of the subscription as day one launches? Will Bethesda’s The Elder Scrolls 6 launch day one on Game Pass? Will the next mainline Halo game? Could we see Game Pass become more like Sony’s PlayStation Plus, which does not launch first-party games day one? Meanwhile, Microsoft is doubling down on its biggest franchises, which for now means more Fallout more quickly.
The implications of the Game Pass failure are far-reaching, with many studios and developers left wondering what the future holds. As Brown so eloquently put it, ‘It’s just a real shame. And as much as people point fingers and call different people within Xbox the villain of the piece, the concept of Game Pass was good. Like, it’s a good idea.’
As the gaming industry continues to evolve, one thing is clear: the future of Game Pass is uncertain, and only time will tell what the outcome will be.
The impact of the Game Pass failure is not limited to Microsoft alone. The entire gaming industry is feeling the effects, with many studios and developers left wondering what the future holds. As Brown’s comments highlight, the concept of Game Pass was good, but ultimately, it was not enough to save the business.
Only time will tell what the future holds for Game Pass and the gaming industry as a whole. One thing is certain, however: the next few months will be crucial in determining the outcome of this significant restructuring.
The exact number of subscribers Microsoft had in early 2026 is unclear, but we do know Game Pass had at least 34 million members as of February 2024. By July 2025, Xbox Game Pass revenue had reportedly reached nearly $5 billion for the first time.
As the gaming industry continues to evolve, one thing is clear: the future of Game Pass is uncertain, and only time will tell what the outcome will be.
