Xbox Has Quietly Paused Third-Party Game Pass Deals as New Boss Asha Sharma Resets Strategy

Xbox Puts Game Pass Third-Party Deals on Ice

If you were a developer deep in negotiations for a Game Pass deal, you just got some bad news. According to Fernando Rizo, former head of sales and business development at Raw Fury and current partner at game advisory firm Caboodle, Microsoft has quietly stopped signing new third-party Game Pass deals. Rizo shared the information on episode 59 of The Business of Video Games podcast after hearing it from multiple developers at a trade show in Italy. The phrase he used was clear: 'everybody got the rug pulled out from under them.' That is not a soft landing for studios counting on that revenue to make their budgets work.

Rizo knows what he is talking about. He spent years at Raw Fury working commercial deals for indie publishers, and now at Caboodle he helps developers navigate exactly this kind of business arrangement. He mentioned that his firm completed a Game Pass deal earlier this year, and his gut tells him they might have been one of the last ones through the door before the shutters came down. This is not a random rumor from an anonymous source on a Discord server. It is a credible industry professional sharing direct conversations with devs who were actively inside the pipeline, people who had real expectations attached to real deals.

A New Boss, A New Playbook

The timing tracks with everything else happening at Xbox. The platform is currently in the middle of a significant overhaul under new boss Asha Sharma, who took over in February 2026 from Phil Spencer and Sarah Bond. Spencer had been the face of Xbox for over a decade, and his departure marked a real leadership transition rather than a routine shuffle. Sharma comes from Microsoft's CoreAI division, which tells you something about where the priorities at the top of the company sit right now. You do not hire an AI executive to run your gaming division and then keep doing business the same way the previous regime did.

Rizo updated his comments after Eurogamer reached out, and he was careful not to over-claim. His read is that this is probably a pause rather than a permanent kill shot, with the new CEO wanting alignment on strategy before the Game Pass team starts cutting checks again. That is a reasonable interpretation. New executives often freeze spending in areas they are not yet fully across while they get their bearings. The problem is that developers and small studios do not have the runway to wait six months while Microsoft finds its footing. The deals being 'on hold' is not a neutral state for everyone affected.

What Game Pass Actually Costs to Run

The financial context around this move matters more than most coverage is giving it credit for. Microsoft spent $68.7 billion to acquire Activision Blizzard, and that debt load does not disappear just because the deal closed. Paying third-party developers to put their games on Game Pass has always been expensive, and it gets harder to justify when you already own studios that can supply content directly. Add in the fact that Xbox recently dropped the Ultimate tier price from 23 pounds to 17 pounds a month but cut day-one Call of Duty from the lineup as a tradeoff, and you can see a business trying to make the numbers work on a service that has not delivered the returns that were promised.

At the Xbox Summer Showcase in June, Game Pass availability was still being hammered in the presentation for nearly every title shown. The messaging on the service has not publicly changed at all. But there is a real difference between touting the library you already own and actively paying outside developers to add their games to it. Xbox has also been pivoting back toward console exclusivity as a strategy, which is a direct reversal of the 'everywhere' approach that defined the Spencer era. If the plan is making your own games the primary reason people subscribe, then third-party payouts become overhead rather than investment.

Developers Left in the Cold

The people who take the hit in this scenario are the developers who structured their release plans around a Game Pass deal that never materialized. Getting into advanced negotiations and then losing the deal is not a minor inconvenience. It affects budgets, timelines, marketing plans, and sometimes whether a studio survives long enough to ship. Smaller developers in particular rely on those guaranteed upfront payments to offset risk and fund development without burning through runway. If Microsoft freezes the program for months while leadership figures out the new direction, some of those studios will not make it to the other side of the pause.

Community Reaction Split on What It Means

Reaction online split predictably between Xbox defenders calling it panic based on second-hand rumors and people who have been watching the platform's slow bleed pointing to it as more evidence of structural problems. One observation circulating makes a fair point: Game Pass is functionally the main reason to own an Xbox right now, and if the service starts pulling back from third-party titles or becoming more first-party-only, the hardware argument gets thinner by the day. That is not a fringe concern. It is a real tension Microsoft needs to address publicly rather than letting industry podcast episodes fill the information vacuum.

The Bottom Line

Microsoft has been raising console prices, cutting Game Pass costs while stripping out premium content, rotating through leadership, and now apparently freezing third-party deals. Every single one of those moves might make sense looked at in isolation. Together they paint a picture of a company trying to reduce spending on a platform that has not delivered the returns the original bet required. The new CEO deserves time to figure things out, no argument there. But developers and subscribers deserve clarity, not a slow drip of industry podcast rumors filling in the blanks that Microsoft refuses to address directly. If the third-party Game Pass model is changing, say so. The silence is doing more damage than the news itself would.