According to TechRadar, Xbox endured a punishing 2025 marked by major missteps. The company raised Xbox Game Pass Ultimate to a steep $29.99 per month, implemented two separate Xbox console price hikes within the year, and laid off a staggering 9,000 employees across studios including Rare, Turn 10, and Bethesda. This all happened as it continued its multiplatform push, sending games like Gears of War Reloaded to PS5 and committing to bring Halo: Campaign Evolved there in 2026. The one strategic bright spot came in October, when Xbox president Sarah Bond confirmed to Variety that next-generation hardware is in active development with AMD. This follows the release of the Asus ROG Xbox Ally handheld, a solid but pricey Steam Deck competitor.
The Game Pass gamble backfires
Here’s the thing: Xbox’s entire modern identity is built on Game Pass. It was the “best deal in gaming,” the glue holding the ecosystem together. But the model showed its cracks. TechRadar points out that putting a huge day-one title like Black Ops 6 on the service last year likely cratered its sales. So what’s the solution? Basically, they turned up the heat on subscribers. That huge price jump for Game Pass Ultimate isn’t just a tweak; it’s a fundamental shift. At over half the cost of a new AAA game every month, it forces a brutal calculus. Is it worth it? The reported crash of the subscription management page as users rushed to cancel suggests a lot of people decided it wasn’t. Microsoft is betting that the core will stay, but they’re risking the very value proposition that made them unique.
hardware-identity-crisis”>Hardware identity crisis
And then there’s the console itself. Why buy an Xbox when its biggest games are going to PlayStation? Microsoft’s answer in 2025 was, bafflingly, to make the Xbox more expensive. Twice. Now a Series X is only $50 cheaper than a PS5 Pro. Let that sink in. You’re paying nearly the same for a 2020 machine versus Sony’s latest premium box. It feels like surrender, like they’re managing a decline to hit profit margins rather than fighting for market share. The new Asus ROG Xbox Ally is interesting, but it’s a niche, expensive PC handheld. It doesn’t solve the core problem: the Xbox console on your TV shelf is having an existential crisis. When your president is talking more about next-gen prototypes than selling the current gen, you know where the focus has shifted.
The human cost of corporate strategy
But all of this pales next to the human cost. 9,000 people. That number is just gut-wrenching. Studios were gutted, promising projects like the Perfect Dark reboot from The Initiative were canceled entirely, and teams that built beloved franchises were dismantled. TechRadar highlights the absurdity of it: Phil Spencer was reportedly so into a game from Zenimax Online that he wouldn’t stop playing it in meetings, and then that studio got hit with cuts and the game was canceled. It paints a picture of a division that’s lost its way, chasing AI dreams and profit targets while the creative heart that built it is being carved out. The “spirit” of the early Xbox days feels completely gone, replaced by spreadsheet logic.
Can 2026 and beyond be a reset?
So what’s left? 2026 is Xbox’s 25th anniversary, and it’s lining up to be a make-or-break year. Clockwork Revolution looks fantastic, Fable is still a huge question mark, and Gears of War: E-Day is lurking. But the fate of the brand might not rest on any single game. It rests on whether that next-generation hardware Bond teased is a genuine revolution. The rumors of a more open, PC-like platform are intriguing. Could that be the bold pivot that redefines what an Xbox is? Maybe. But after the brutality of 2025, rebuilding trust with both players and developers will be a monumental task. The mandate is clear: 2026 has to be better. If it’s not, the Xbox we knew might just fade into a publishing label. And what a sad end that would be for a brand that once defined console innovation.
