The Subscription Service Model Has Failed For Xbox

Highlights

The closure of prominent gaming studios like Arkane Austin and Tango Gameworks is a tremendous loss to the industry.
Despite having Xbox as a big publisher, studios like Tango Gameworks are at risk of closure even after creating award-winning games.
Publishers are buying up studios with no regard for long-term thinking.

Yesterday, the shock closures of Tango Gameworks, Arkane Austin, Alpha Dog and Roundhouse Games were reported in the press. These studios leave behind immense legacies, and their closures are nothing short of tragedy.

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In the wake of these events, one would have to conclude that Xbox’s bet on Game Pass has failed. If there’s no place for the studio that created the award-winning Hi-Fi Rush, the kind of shorter, unconventional game that should thrive on Game Pass, then how can any day-one Game Pass game be a good barometer of success?

Success Is Irrelevant

Arkane Austin’s most recent release Redfall was an abject failure, but this is the studio that developed Prey, and Dishonored (in collaboration with Lyon). Surely one of the benefits of having a big publisher like Xbox is that you’re somewhat insulated from the occasional failure. It’s not why Redfall failed, but why would any studio ever try something unorthodox if it could get shuttered by its $3 trillion parent company if it goes wrong? Or even if it goes right, in Tango’s case.

I was excited about Game Pass. Game Pass gave us Pentiment, my 2022 game of the year. It would appear now that the “reprioritisation of titles and resources” favours the money-makers within Xbox. How many times have we seen an acquisition spree followed by a re-focus on ‘core businesses’ when everything goes wrong? We bought the thing you love, and now we’re abandoning it to go back and do what we were already doing. It’s become very typical behaviour, as intellectual property rights become more important than the people making games.

Xbox boss Phil Spencer, in a leaked internal email, once said that Xbox has never closed a studio because of its profit and loss. He pointed to the closure of Lionhead after the studio’s leadership left, and Ensemble because of a loss of passion for the Age of Empires series. Spencer has yet to speak on the recent closures, I wonder what he’ll say this time?