Xbox Studio Leaders Detest Game Pass as Subscribers Fall 47 Million Short

Several studio leaders inside Xbox privately detest Game Pass, according to Bloomberg journalist Jason Schreier, who says the subscription service gutted the retail value of games their teams spent years building. Schreier laid out the backlash on the Triple Click podcast, days after fresh reporting showed exactly why tempers are short: Xbox Game Pass now sits near 30 million subscribers, less than half the roughly 77 million Microsoft had modeled for this year.

Phil Spencer, who ran Xbox for close to a decade before Asha Sharma took over as chief executive, first pitched the service as gaming’s answer to Netflix back in 2017. Nine years later, the studios that bet was supposed to serve are the ones pushing Microsoft to unwind it.

A $40 Game Now Rents for Pennies a Month

Schreier built his case on episode 313 of the Triple Click podcast, using the 2025 narrative game South of Midnight as his example. Compulsion Games’ title retails for $39.99. On Game Pass, subscribers got it the day it launched for whatever their monthly tier cost at the time, somewhere between $15 and $20 a month.

That gap, Schreier argued, is exactly what is souring studio leadership on the service. A niche hit that could not carry its own weight as part of the subscription was also losing full price buyers who would rather pay a few dollars a month than $40 outright.

There are a lot of people out there in studio leadership within Xbox who absolutely detest Game Pass and think it has destroyed the value of their games.

Schreier said this on the Triple Click podcast episode on Xbox’s layoffs, adding that the resentment has spread from any single release to how subscribers now value games as a category. Moon Studios chief executive Thomas Mahler made a related point separately, arguing Game Pass never delivered the breakout hits a subscription service actually needs to justify itself.

The 77 Million Subscriber Bet Behind a $69 Billion Deal

Spencer’s original pitch looked almost modest by comparison. He made his pitch for Game Pass as gaming’s Netflix to The Guardian in April 2017, arguing subscription access could do for story driven games what streaming did for television. The service launched that year at $9.99 a month with roughly 100 titles and offline downloads built in.

The comparison stopped being a metaphor once Microsoft went shopping for Activision Blizzard. Documents that surfaced during the 2023 FTC trial over the $69 billion deal showed Microsoft had modeled Game Pass reaching about 77 million subscribers by 2026, with a longer range goal of 100 million by 2030. Owning Call of Duty, the logic went, would convert its enormous install base into subscribers at scale.

It didn’t play out that way. By February 2024, Microsoft’s last official count put Game Pass at 34 million subscribers, having absorbed former Xbox Live Gold members along the way. Wall Street Journal reporting relayed by IGN in recent weeks puts the figure closer to 30 million today, roughly 47 million short of the number baked into the Activision Blizzard math.

Sharma has since acknowledged the gap without publishing a new official number. She told staff in June that Game Pass had started to grow again after roughly eight months of decline, though she offered no target to measure that recovery against.

Price Whiplash Made the Shortfall Worse

Microsoft’s own pricing decisions didn’t help the math. In October 2025, Xbox Game Pass Ultimate jumped 50%, from $19.99 to $29.99 a month, a move the company framed as funding for more high profile titles and added features.

Subscribers revolted almost immediately. Notebookcheck reported that Xbox’s own cancellation page buckled under the volume of members trying to leave. At Summer Game Fest 2026, Xbox’s chief strategy officer, Matthew Ball, confirmed the service lost millions of subscribers in the months that followed, a decline that lines up neatly with the drop from 34 million in 2024 to roughly 30 million today.

Sharma reversed course in the spring. The April announcement cutting Ultimate to $22.99 still left the tier above its original $19.99 price, but it undid most of the increase and arrived bundled with a bigger structural change: future Call of Duty games would stop launching day one on the service.

Call of Duty Quietly Loses Its Day One Seat

Call of Duty was supposed to be the proof that Game Pass could work at scale. Black Ops 6 in 2024 and Black Ops 7 in 2025 both launched into the subscription the same day they hit store shelves, and Black Ops 7’s current Game Pass listing still shows the game in the catalog today.

Modern Warfare 4 breaks that pattern. The game is set to launch October 23, 2026, and Game Pass subscribers will have to buy it at full price like anyone else. Industry reporting expects the title to reach the subscription around late 2027, well after its highest margin sales window has closed.

Schreier predicted almost exactly this shift on Triple Click, saying Xbox would eventually “remove day one sales, because that makes no sense anymore.” Tech Insider has reported that Black Ops 7 itself underperformed both critically and commercially in 2025 despite the day one Game Pass push, undercutting the very argument that catalog access reliably grows an audience.

Asha Sharma Inherits an Unfinished Bet

Sharma’s own account of how Xbox got here is blunt. In the staff memo announcing the studio reset, she wrote that the business is not healthy and said it is operating at margins three to ten times below comparable platform and publishing companies.

She named three specific bets that fell short of expectations: Game Pass, releasing games on rival consoles, and a broader content portfolio built through acquisitions. All three, she wrote, created meaningful value but none grew at the pace Microsoft expected.

• Xbox Game Pass – the subscription meant to convert console owners into recurring revenue, now near 30 million subscribers against a 77 million target
• Multi platform releases – putting first party games on rival hardware, a push visible in Wo Long: Fallen Dynasty’s new Switch 2 port
• Broader content portfolio – the acquisitions, including Activision Blizzard, that were meant to feed the subscriber math in the first place

The reset Sharma is running includes cutting 3,200 jobs by July 2027, on top of codev partners and vendors also losing contracts. Microsoft has already walked back part of the multi platform push too, returning to situational exclusives like Gears of War: E-Day. Spencer, who spent years defending Game Pass against internal skeptics, left Sharma the job of deciding how much of it survives.

Will The Elder Scrolls VI Skip Day One Too?

Probably. Xbox has already pulled future Call of Duty games from day one Game Pass access, and the studio backlash Schreier described points to other big first party releases getting the same treatment once Sharma finishes reshaping the subscription’s economics, The Elder Scrolls VI included.

Bethesda’s long awaited role playing game hasn’t been dated, but it sits in exactly the category Schreier flagged: a first party release expensive enough to lose real money if it launches straight into a $22.99 a month subscription.

The template Xbox appears to be building looks like Call of Duty’s new schedule. Full price at launch, subscription access much later, after the game has already banked its highest margin sales.

Modern Warfare 4 arrives October 23, 2026, without Game Pass day one access for the first time in the franchise’s subscription era. It will be the clearest test yet of whether Xbox can keep the service alive without the very games its own studio leaders say it devalued.