The bad news keeps rolling in for Xbox gamers. A new report suggests that Microsoft could be abandoning its next console.
A very reliable insider claims that Microsoft is planning some very “intense” changes for the Xbox brand, and we could see them come to fruition in the coming months.
The first change, unfortunately, will come in the form of another round of layoffs heading into Q1 2026, and the company’s next console generation may never see the light of day.
The insider continues by pointing out that Xbox’s future will focus solely on game publishing and will altogether ditch the hardware component, highlighting the top-performing IPs in its portfolio while no longer considering the development of new consoles.
While this is only a rumor and should be met with skepticism, The Verge’s Tom Warren added fuel to the fire when he said during a recent episode of the XboxEra podcast that the source “knows a lot of what goes on internally.”
In another post on NeoGAF, the reliable source, who goes by SneakersSO and also happened to hint at Microsoft’s shift to third-party development before it occurred, broke down the entire rumor regarding the future of Xbox’s hardware and how the company will be moving forward.
Per NeoGAF:
Without going into too much detail, not long after the last round of layoffs (next one should be coming in Q1 26 btw – and its going to be just as massive as the last one), some rumblings out of Xbox starting coming out that were a little hard to believe.
The ramifications of the CoD GP gambit not working out were just starting to get properly measured, but the thing that really stuck out to me was that suddenly, really concrete plans for actual MS Xbox HW went from being definitive, to up in the air, which was really startling given that this thing was meant to be out relatively soon. It was one of those situations where, despite folks being told ‘hey, we wanna pull the trigger on this in 2026’, the steps you would need to take in the lead up to delivering a new console gen weren’t being met. Lots of things that were ‘sure things’ started getting pushed. The Costco retailer pulling Xbox, and apparently they are one of many that we’ll learn about soon, told me all I needed to know.
To sum it up: the future of Xbox is software publishing, with a significantly honed-in focus on profitable IPs (CoD, WoW, Minecraft, Candy Crush, Forza Horizon), Cloud gaming being the home of the ‘Xbox platform’, transititioning GamePass into basically becoming the point of entry subscription for xCloud access (which will continue to drive its price tag higher btw, they aren’t done there just yet either), and releasing their software on any device that has a marketplace and users willing to buy their titles.
Maybe some OEM thing will take up the Xbox name, but given what is clearly a collapse in favorable mindshare and faith in said brand, i’m not even sure a 3rd party OEM is gonna want to have an Xbox console by the time MS is done with their reorienting of the division.
We Can Only Hope This News Isn’t True
We genuinely hope the news about the layoffs doesn’t come to pass, because the video game industry has been taking a significant hit, and many people have lost their jobs over the past several years.
But it just seems like that news is inevitable. As for Xbox’s shift to third-party, it appears to be a done deal, and following the latest news about the Xbox Game Pass Ultimate price hike, losing money on COD after bringing it to Game Pass, and how the Black Ops 7 beta is underperforming compared to Battlefield 6, it’s not sounding too good for Microsoft right now.
You can see reactions to the rumor below.
