Key Takeaways
- Industry sources claim Xbox has halted new third-party Game Pass deals, leaving several developers without finalised contracts.
- Kaboodle Games CEO Fernando Rizo said developers had “the rug pulled out,” believing his studio signed one of the last deals.
- Phil Spencer’s retirement and Asha Sharma’s appointment reportedly marked a major shift in Xbox’s strategic direction.
- Another report claims Microsoft may sell Xbox, though the rumour remains unverified by additional credible sources.
Despite the optimism surrounding June’s Xbox Games Showcase, featuring Gears of War: E-Day, Persona 6, and Halo: Campaign Evolved, reports suggest Microsoft has paused third-party Game Pass deals, leaving developers in advanced negotiations without contracts or an explanation.
The claims came via TheGamer’s coverage of the Business of Video Games Podcast, where Arrowhead Studios CEO Shams Jorjani and Kaboodle Games CEO Fernando Rizo discussed conversations from First Playable in Italy.
Rizo said, “Word on the street is that loads of people who were in the frame for Game Pass deals… everybody got the rug pulled out from under them.”
What the Sources Are Saying and What It Means
Rizo stressed he was sharing his interpretation, not confirmed fact: “I think they’re on pause. I think they’re figuring it out. That’s my read anyway.”
He said Kaboodle Games signed a Game Pass deal earlier in 2026 and may have been among the last third-party studios to do so.
If accurate, the pause aligns with Phil Spencer’s retirement from Xbox and Asha Sharma’s appointment. Because Game Pass deals are typically confidential, multiple developers now discussing failed negotiations suggests growing frustration.
Just months ago, Xbox cut Game Pass Ultimate from $29.99 to $22.99, reinforcing the service as the core of its consumer strategy.
The reported pause in third-party deals suggests a broader shift under the new leadership, with the future of Game Pass now being reassessed.
The Broader Context Is Not Reassuring
The reported pause in third-party Game Pass deals comes as Xbox Series X and Series S prices have risen by $100 to $150 in 2026, driven by the AI-fueled memory shortage affecting major hardware makers.
At the same time, a report cited by Game Rant claims Microsoft has explored spinning off Xbox into an independent company. The claim remains unverified, but its emergence reflects growing uncertainty around Microsoft’s gaming strategy.
Phil Spencer’s retirement earlier in 2026 ended an era marked by the Activision Blizzard acquisition, Game Pass expansion, and the multiplatform push that brought titles like Fable to PS5.
Under Asha Sharma, the Game Pass pause could reflect a strategic reset or a more permanent shift. Either way, it leaves independent studios rethinking release plans built around Game Pass.
Source: Xbox Reportedly “Rug-Pulled” Third-Party Developers Over New Game Pass Deals
