Xbox reportedly pausing third-party Game Pass deals while Microsoft figures out its next move

Microsoft has quietly put third-party Game Pass deals on hold, according to Fernando Rizo — partner at London consultancy Caboodle Games, former CEO of Modern Wolf, and ex-director of marketing and business development at Splash Damage. Rizo shared the claim on his podcast, co-hosted with Arrowhead CEO Shams Jorjani, after attending the First Playable trade show in Italy.

Rizo described conversations with unnamed developers at the event: deals that were in advanced discussions — nothing signed, but well along — were suddenly shelved. "Everybody got the rug pulled out from under them," he said. He stopped short of declaring Game Pass dead, but does expect a clear pause on new third-party additions while Microsoft works through its current restructuring. The timing is notable: Microsoft's financial year ends June 30th, making a temporary freeze ahead of major business announcements plausible.

Game Pass has been Microsoft's flagship bet for years — the so-called Netflix of gaming, bundling first-party titles with a rotating selection of third-party games, often from smaller studios. It reportedly has millions of subscribers and is profitable, but apparently not profitable enough given the context: a $69 billion Activision Blizzard acquisition, heavy investment in generative AI, and a gaming division that new Xbox CEO has publicly described as "over-extended." Microsoft recently pulled Call of Duty from Game Pass day-one launches while cutting the subscription price — a move that signals the service's economics aren't working the way they hoped.

None of this is confirmed by Microsoft directly, and Rizo is clear he's passing on trade show gossip rather than insider knowledge. Still, the pattern fits: layoffs are ongoing, studios are reportedly at risk of closure, and the company is visibly reassessing its gaming strategy. If the pause on third-party deals is real, smaller developers who were counting on Game Pass money to fund development are the ones left holding the bag.