"What happened with Microsoft was clear": Former Square Enix exec says Game Pass, "a service with barely any growth," didn't cause layoffs – competition with AI did

(Image credit: Xbox)

Jacob Navok – the CEO behind Silent Hill: Ascension streamer Genvid, and former Square Enix business director – believes that Microsoft's latest round of crushing layoffs came from a power struggle with AI technology that's currently reshaping the entire video game industry.

"The game industry is facing a fundamental realignment," Navok writes in a lengthy Twitter thread. "This is not a passing storm. It is a change in the forces that stitched the industry," which is now being held together by the more individualistic, flexible experiences offered by platforms like Roblox, Fortnite, and GTA Online.

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"Enter AI," Navok continues. "What happened with Microsoft was clear: AI is a one-in-a-generation change in the entire digital order." He's preparing for a day when PCs are littered with "Roblox-like platforms built with AI prompts where kids just enter the type of entertainment they want."

Those both in favor of AI creeping into all parts of the day and those terrified of the possibility have warned of a similar future for decades; French philosopher Jean Baudrillard even defined the idea of a "hyperreality" with no real-life origin in the '80s. Still, virtual reality tech like the Oculus Rift has never gotten close to being a replacement for old-school flesh and blood.

But Navok thinks that, when it comes to our currently more lightweight and convincing generative AI tech, Microsoft "must either get on board, or perish."

"Don't be misled [...] that the industry's problems can be chalked up to Game Pass, a service with barely any growth the last few years," he says. "The platforms with the most creators and players generate the most value."

Microsoft reportedly doesn't include lost first-party game sales when calculating Xbox Game Pass profits, but the subscription service is apparently earning money regardless.

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Ashley is a Senior Writer at GamesRadar+. She's been a staff writer at Kotaku and Inverse, too, and she's written freelance pieces about horror and women in games for sites like Rolling Stone, Vulture, IGN, and Polygon. When she's not covering gaming news, she's usually working on expanding her doll collection while watching Saw movies one through 11.

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