Former PlayStation boss and Ori creator pile on Xbox Game Pass and studio closures

Xbox is having a rough week, and the industry is noticing. With reports of imminent closures at Double Fine, Ninja Theory, and Compulsion Games arriving just days after the Xbox Games Showcase, veteran voices from outside Microsoft are speaking up — and they're not being gentle.

Shawn Layden, who spent 32 years at Sony and oversaw the PS5 launch before stepping down in 2019, responded to a LinkedIn post by game consultant Tadhg Kelly that catalogued Xbox's recent contradictions: a new CEO, a rebrand that looked like the old brand, simultaneous claims that 30% margins are unacceptable and 3% margins are trouble, a showcase of new games followed immediately by the closure of studios making those games. Layden's verdict: the moves show "a basic misunderstanding of how the interactive entertainment world moves." He also called the studio closures a case of "Rapid Unscheduled Disassembly" — borrowing SpaceX's euphemism for explosions — and said he feels bad for the dev teams caught in the chaos.

Moon Studios CEO Thomas Mahler, creator of Ori and the Blind Forest, went further on X, targeting Game Pass directly. He argues the subscription model could have worked, but Xbox never produced the games to justify it. "You need those games your studios are producing to become smash hits, cultural events that everyone wants to play — but what was the big Xbox game in recent years that was just delightfully good? That game doesn't exist," Mahler wrote. He pointed to Starfield as the clearest example of a game that should have been a generation-defining hit and wasn't. His sharpest line: Game Pass is "a little like Communism" — without real incentives for developers to produce massive hits, the whole system collapses. That collapse has data behind it: when Xbox raised Game Pass prices last year, it lost millions of subscribers according to Matthew Ball, the games industry analyst who has since been hired as Xbox's chief strategy officer.

It's worth noting that Game Pass has hosted genuine hits — Expedition 33, Hades 2, and Kingdom Come: Deliverance 2 all landed on the service — but none of them are Xbox exclusives, so they don't give players a reason to subscribe over just buying elsewhere. Forza Horizon 6 is the first major exclusive in years and is breaking records, but a single timed exclusive isn't enough to reverse the trajectory. With Bobby Kotick on record saying he told Satya Nadella directly that Microsoft "shouldn't be in gaming" because it's "not a creative DNA company," the criticism is coming from every direction. What Xbox does next — beyond closing studios and hiring strategy consultants — remains unclear.