I was wrong about Xbox and Microsoft, it’s worse than I thought

When this console generation first began, I thought Microsoft was due for a comeback. Just two months before the launch of the Xbox Series X/S, Microsoft announced the purchase of Bethesda and Zenimax, a huge purchase which added to Microsoft’s already strong first-party line up, and it was promised that each of the future games from Bethesda and Microsoft would come to Xbox Game Pass on day one. From my perspective, if you’re a more “casual” gamer, or if consoles in the house are primarily for the family and kids, then Xbox Game Pass and an Xbox Series S is – or was – one of the best deals in gaming.

Then Game Pass slowly became a Netflix-like subscription — not in terms of how it dished out content, but because, like Netflix, you pay for it and never actually use it. Yeah, sure, games were being added every month, but they weren’t games for me, and my Xbox was being used less and less. Then Microsoft purchased Activision for billions of dollars, and raised the price of the Game Pass subscription I still wasn’t using.

At the start of this console generation I genuinely believed that Sony and PlayStation had become too complacent and that the value of Xbox Game Pass would eat away at Sony’s market share. The Xbox One was a fumble for Microsoft, but the best games of that generation were now available on Game Pass and playable on a new Series console. I thought the Xbox Series S and Game Pass would be too irresistible for most gamers to ignore. I was wrong.

Instead of staying the course, Microsoft has launched its gaming division off of a cliff, and it’s clear now that the leadership at Xbox is not fit for purpose. Even in an era where Sony is repeatedly dropping the ball, an era where a PS5 Pro releases before the PS5 even gets a decent first-party library, Xbox Games Studios is clearly a complete mess.

For example, Everwild. The UK’s Rare – formerly Rareware – is a beloved studio for millions worldwide. Responsible for Banjo-Kazooie, Conker’s Bad Fur Day, Donkey Kong Country, Viva Pinata, and many more — this is an accomplished studio that has crafted childhood classics. Now, Rare has been gutted, leading to the cancellation of Everwild, a game that has been in some stage of development since 2014 and got its first trailer in 2019. That’s over ten years of development on a game we will never see.

This can only happen through executive incompetence. Some former staff at Xbox studios have expressed frustration with the corporate structure and oversight, whereas elsewhere it seems that a hands-off approach from Xbox resulted in stalled, protracted development schedules. Microsoft’s The Initiative studio was founded in 2018, and worked on nothing but Perfect Dark, alongside Crystal Dynamics and Certain Affinity. It is now 2025, and Perfect Dark is cancelled with The Initiative shuttered. Seven years and nothing to show for it.

Last year, Sony launched Concord, the first game from Firewalk Studios, which was founded in 2018. The game was shut down after two weeks, and Firewalk Studios was closed. This harsh, knee jerk reaction felt like total overkill. Concord couldn’t find success because of a crowded market, but that didn’t mean that it couldn’t earn a solid audience over time if it switched to F2P and got a suite of updates. It had potential, but Sony didn’t agree, or wasn’t willing to sink more money into development. Concord’s impact didn’t end there, though.

It was a rough launch, but a finished, polished product was released. Since then Sony has revised its goals and aims, cancelling several of its previously touted “12 live service games” that were in development. Spider-Man online, live service Twisted Metal, live service God of War, The Last of Us Online, a Destiny spin-off — all of these have been canned, and it’s a good decision. Making a live service game based on a popular franchise isn’t a guaranteed way to print money when gamers have their attention split between dozens of online options, and crowding that market with a dozen of your own titles is clearly a mistake. Sony has wasted most of this console generation chasing a trend and it didn’t even get up to jogging pace. And yet, this somehow feels like a genius strategy compared to Microsoft’s repeated gutting of talent.

While the Western games industry fears a modern industry crash (which is arguably already happening if you look at these layoffs), the Eastern industry is thriving. A mix of weak Yen and incredibly strong releases has publishers like Nintendo, Capcom, and Bandai Namco seeing continued success. It’s incredibly difficult to lay-off staff in Japan, meaning sustainable growth takes priority over short-term gains. It might not be why Japanese publishers are doing well, but job security and no brain drain goes a long way. Publishers outside of Japan are doing great too; new entrants into the triple-A development space like Game Science’s Black Myth: Wukong and Shift Up’s Stellar Blade are seeing international acclaim.

Microsoft isn’t unique in its strategy of laying off staff to save cash short-term, but thanks to its studio spending spree over the last decade, its layoffs are felt more keenly across the industry. Of its Bethesda studios, Microsoft has closed Alpha Dog Games, closed and then sold Tango Gameworks, closed Arkane Austin, and folded Roundhouse Studios into ZeniMax Online. Microsoft hasn’t had the time to take the axe to its Activision and Blizzard studios in quite the same way, but layoffs have still happened, and Warcraft Rumble updates are indefinitely delayed as a result. The studios Microsoft doesn’t even own are getting hit too, with Doom co-creator John Romero seeing his studio, Romero Games, lay off all of its staff after Microsoft pulled funding for its new FPS project.

It was only a few weeks ago that Xbox and AMD announced a new partnership for next-gen hardware, but now it is clearer than ever that there’s no reason to get excited. Whether the future of Xbox is a PC handheld, or a branded living room PC, I don’t care. There’s no reason for me to care, because I can’t trust the publisher to actually publish games I care about.

Right now, Microsoft owns the rights to some of the most beloved gaming IP of all time. Crash Bandicoot, Spyro the Dragon, StarCraft, Warcraft, Diablo, Fable, Conker, Age of Empires, Tony Hawk’s, Killer Instinct, Halo, Gears of War, Guitar Hero, Perfect Dark, The Elder Scrolls, Fallout, Doom, Forza, Gears of War, Wolfenstein — the list goes on, and on. Now, how many of these games are going to get new entries in the next five years? Honestly, I’m being generous: five years. That’s a full development cycle for a triple-A game. 

With dozens of studios under its umbrella and billions of dollars that it throws around seemingly for fun, it would be entirely possible for Microsoft to publish a new game in each of these franchises, if it really wanted to. But apart from things we already know about, like Gears of War, Fable, and Tony Hawk’s, I don’t have high hopes. 

During Microsoft’s acquisition of Activision-Blizzard, it was revealed via FTC leaks that The Elder Scrolls 6 would release “in 2026 or later.” The “or later” bit feels especially pertinent, seeing as Phil said the game was “five plus years away” in 2023. It’s 2025 now, and Bethesda’s team has only truly finished development for Starfield with September 2024’s Shattered Space DLC — keep in mind Starfield suffered two delays itself, which surely pushed TES6 development back. I’m not saying The Elder Scrolls 6 hasn’t been in development at the same time, but I am saying that the team couldn’t have been all-hands-on-deck. The development length for these games keeps getting longer, and the expectations rise along with the wait time the fans have to endure.

So now I have to ask, how long are we going to keep paying for Xbox Game Pass, waiting on games that will never release? I know there’s a lot more on the service than first-party titles, but unless you’re embedded in the Xbox ecosystem with no other platform to play games on, there’s no reason to pay up for Game Pass a year at a time. You’ve likely already played most of the titles you’re interested in, or could clear up the rest with a one-month sub. 

It seems impossible for a large, multi-billion-dollar corporation to be moral or ethical, but Xbox and Microsoft right now feels like a net negative for the industry. That’s the developers, the games, and the players. The company is more profitable than ever, but throwing the people that got them there to the wolves. I genuinely thought that the Xbox Series generation would see Microsoft rise to dominance again, and for a short period I even had a hope that the Activision-Blizzard buyout would see things improve for the studios forced into being support for Call of Duty. I was wrong, and although I want to see true competition in the console space, I’m struggling to see a future where I can support Microsoft’s razing of the industry.