Where should I start? Microsoft's stewardship of its growing gaming empire, which includes Xbox consoles, the Game Pass subscription service and not one, but three major publishers, has had another epic, infuriating and bewildering year. The tech giant is pursuing a gaming strategy that continues to break industry norms, but is also visionary in some ways and idiotic in others. Its purchase was finally starting to bear fruit, with an unprecedented number of new games being released while management began a destructive, profit-hungry cash grab that threatened to ruin the fans' reputation forever. Amid all this furor, the future of Xbox consoles has never looked more precarious. It is and was many.
This year, Microsoft brought Forza and Gears of War to PlayStation – and finally broke the ultimate taboo and announced that it would I'll do the same for Halo soon. This year the company said its next Xbox would be a PC, and an expensive one. This year the company released a $1,000 pocket computer that was supposed to be made by another company. This year, the AAA studio closed, which never released a single game.
Behind all this chaos were two strategic imperatives. The first is very public, it is widely described in everything Microsoft does and its management says, and although it may be unpopular, it is sincerely motivated. This is the desire to create a lot of games and put them everywhere you can play: in the cloud, on Steam, on competitors' consoles, on your phone. This is Xboxeven if it's a PlayStation. Fans bristled, but the numbers didn't lie: Forza Horizon 5 was amazing hit on PlayStation 5 this year, and a whole new community getting access to the best racing game has to be a positive thing. Indiana Jones and the Big Circle And Gears of War: Reboot followed on the heels of Forza.
The second strategic imperative, which overlaps with the first (but is not necessarily its sole motivator), is more secretive and nefarious. In October Bloomberg revealed that Microsoft CFO Amy Hood insisted that the gaming division achieve 30% profit margins, a figure that is virtually unprecedented in the gaming industry and virtually unattainable.
This ridiculous goal is undoubtedly the reason for the waves of layoffs that culminated in the cancellation of Rare's. Everwild And Perfect darkness a reboot that also spelled doom for the latter's developer, The Initiative, a studio that was founded in 2018 and never got the chance to finish the game. This is probably what prompted the (hastily withdrawn) decision to sell. The Outer Worlds 2 for 80 dollars. That's why Xbox Game Pass price increased by 50% along with yet another confusing and possibly sneaky restructuring of its proposal. This must be one of the reasons why Xbox consoles saw two price increases in six months resulting in the top model Xbox Series X costing $800.
To be fair, there are other factors behind these alarming developments, and only one of them is Microsoft's decision. historically wasteful mismanagement of game developers. Another is the Trump administration's tariff policies, and the third is the skyrocketing cost of the silicon needed to make consoles, a result of the explosive growth of artificial intelligence data centers (in which Microsoft is an enthusiastic participant). But that 30% margin target should have a huge impact. Let's be clear: a healthy creative industry can and should work not only for great art, but also for money. But bad goals lead to bad decisions and disastrous results.
Under this relentless pressure to attract more players and make more money, Microsoft appears to have decided that it doesn't want to achieve either of those goals by selling game consoles. The price increases and the virtual end of exclusive consoles show that Microsoft has given up all hope of saving the Xbox Series S and X. both great machines, possibly Microsoft's best – from a distant and shameful third place in the current generation console race. This year, amid growing fears that the company was about to leave the console business for good, Microsoft was forced to repeatedly say it would return. But come back with what?
It's become clear from both leaks and public comments from Xbox boss Sarah Bond that the next Xbox will be Windows-based, will work with rival game stores like Steam, and will be a “very premium” (read: very expensive) device. In other words, it's a gaming PC, perhaps even more so than the upcoming Steam engine. This could be a very powerful and flexible gaming system, but it doesn't look like it will be a mass market product. Make no mistake, this is a move away from direct competition with Sony and Nintendo.
Another worry for Xbox fans is that the game might not be very good. It was mine unsuccessful withdrawal from using ROG Xbox Allya joint initiative between Microsoft and laptop maker Asus that served as a soft launch of sorts for the future Windows-based Xbox. The Xbox Ally, in its $600 or $1,000 version, is a mediocre, overpriced portable that offers amazing compatibility with all your game libraries, but is unfortunately saddled with all the inelegance, unreliability, and painful lack of cool that comes with Windows. In other words, this is not a Steam Deck. We hope the version of this experience created by Xbox's excellent in-house engineers is better, because it really should be
It's a shame that all this disaster and confusion obscures the fact that 2025 was Microsoft's best year as a game publisher in quite some time. There was no defining, mainstream title – not after the planned 2025 Xbox tentpole. Fable the reboot was delayed until next year—but that was the point. This year has shown the enormous range and capabilities that Microsoft studios are now capable of.
And it comes in a relatively quiet year for Microsoft's biggest acquisitions. Blizzard had no new releases, Bethesda and Activision only had a couple of things. But the expanded Xbox Game Studios group has finally come into its own – especially Obsidian Entertainment, which has released no less than three games. The full lineup is impressive: Recognized, Call of Duty: Black Ops 7, Doom: Dark Ages, The Elder Scrolls 4: Oblivion Update, Gears of War: Reboot, Grounded 2, Guardian, Ninja Gaiden 4, The Outer Worlds 2, South of Midnight, Tony Hawk's Professional Slater 3+4as well as smaller releases such as Towerborn And Retro classic for Xbox and extensions for The Elder Scrolls Online And Indiana Jones and the Big Circle.
You can criticize the line for its lack of any truly standout releases, or you can praise it for its yearly offering of varied, interesting, accomplished, and mostly very good games. Ninja Gaiden 4 This is a hardcore action game perfect and a sentimental nod to an old Xbox loyalist; Recognized it is a characterful, engaging role-playing game; Guardian And South of Midnight are artful expressions of storytelling style. It has old school craftsmanship and great entertainment.
It's also worth noting that Microsoft can claim some of the glory that critical darlings and Gaming rewards juggernaut Chiaroscuro: Expedition 33. The deal, which brought the game to Game Pass on day one, appears to have played a crucial role in funding this ambitious project. This was certainly a feather in Game Pass's cap, and Microsoft's enthusiasm for promoting the game was the first impetus for its meteoric success.
Unfortunately, this happy family also has a howling black sheep. Call of Duty: Black Ops 7 just shy of being a disaster. Fans hate it, it happened the new Battlefield game has significantly outsold for the first time in the history of the series, and Activision had to bring some kind of accusation. Microsoft spent almost $70 billion acquiring COD (and many other things, but primarily COD), only to have the series fall off the creative and commercial rails almost immediately. Classic Microsoft!
It's exhausting just thinking about the year Xbox and Microsoft just had. What will 2026 bring? A new Fable, a new Gears of War, a new Forza Horizon, a new era of Halo, possibly many more games and of course a lot more confusion and controversy. It will be another important year, hopefully a more stable one. But I suspect we'll end up asking the same question: where exactly does Xbox think things are going?
