Microsoft are easing off on third-party game deals for the Xbox Game Pass subscription service, according to one fairly seasoned industry figure, while they “figure out” what to do with their gaming business in general.

The seasoned industry figure in question is Fernando Rizo – partner at London-based consultancy Caboodle Games, former CEO of publishers Modern Wolf, and former director of marketing and business development at venerable shooter outfit Splash Damage. Rizo co-hosts a podcast with Shams Jorjani, CEO of Helldivers developers Arrowhead. During the pod’s latest episode, he offered a summary of conversations with unnamed devs at Italy’s First Playable trade show.

“I was at a trade show in Italy, had some nice lunches, some nice dinners with industry colleagues,” Rizo expounded, “and word on the street was that loads of people who were in the frame for Game Pass deals – i.e., you know, nothing was inked yet, but the deals were in advanced discussions – everybody got the rug pulled out from under them.”

Assuming the scuttlebutt is on the money, it could be a routine suspension of negotiations ahead of a round of larger business decisions and announcements – the end of Microsoft’s financial year is tomorrow, 30th June. It could also represent a longer-term policy shift. Game Pass has been Microsoft’s great hope these past few years, a widely touted ‘Netflix of gaming’ offering access to both first-party games and a range of more eccentric projects from smaller third-party teams.

While reportedly profitable with millions of subscribers, Game Pass doesn’t appear to be as popular as Microsoft would like. And certainly, not as popular as they would like in the context of some exorbitant studio acquisitions, and a commercial landscape distorted by enormous investment in generative AI. Recently, Microsoft decided to stop offering Call of Duty games via Game Pass at launch, while lowering the price – a sign that whatever they’re getting from Game Pass isn’t enough to offset potential lost direct sales from the rampaging manshoot series.

Rizo himself doesn’t think “Game Pass is over”, but he does think there will be a hiatus on new third party games for the subscription service, while Microsoft busy themselves laying people off and potentially, closing or selling whole studios. “I think they’re on pause,” he said. “I think they’re figuring it out. That’s my read anyway. But yeah, for the time being, it seems like Game Pass deals – like, we just did one at Caboodle earlier in the year, and I get the feeling that it might have been one of the last ones [anyone] did.”

I’d be very surprised if Microsoft don’t take an axe to parts of their Game Pass programme in the course of their wider corpobutchery. The executives have made clear that nothing is off the table. That said, it’s worth noting that this is all secondhand gossip. I got in touch with a few relatively senior people off the record at different videogame companies, after reading the news this morning. I’ve yet to receive any corroboration that MS are putting new third-party deals on ice en masse. It’s possible that whoever Rizo spoke to just failed to convince MS about their game in particular.

Again, Microsoft’s latest financials are coming shortly. We will presumably hear more about their business “reset” then, together with the impact on Game Pass. In other news, Microsoft continue to be the subject of a boycott in response to their business relationship with the Israeli military during the current invasion of Gaza.