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this post was submitted on 06 Jul 2026
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That's part of it, but it's also because the industry saw a massive spike in profits during COVID when everyone was stuck at home, and shortsighted executives made hires and investments as if that money train was going to continue forever. Once things went back to normal they immediately started canceling projects and firing talent.
Microsoft is also going through leadership changes, and it's unfortunately common for incoming executives to can projects started by their predecessor since they won't get the credit for them.
Of course it's the employees who pay for their idiocy and not the ones who actually fucked up.
Edit: I remember reading a thread several years ago about just how dysfunctional Microsoft's gaming wing is and how Phil Spencer almost singlehandedly kept clueless higher ups from destroying the brand with their dumb, out-of-touch ideas. With his retirement, I have a feeling Xbox will enshittify at speeds we've never seen before.
This is what I see too. Like so many industries short term profit chasers never thought that things might slow down after everyone went back outside.
They could have saved that profit and invested instead into long term longevity, but no, had to plan like it'll be there forever. I swear to god it only takes a 5th grade completion certificate to be an executive.
When COVID relief was handed out (and after Trump neutered investigations into relief fraud), a bunch of corporations immediately used the extra cash to fund stock buybacks instead of using it to shore up their finances - literally putting shareholder profits ahead of the health of their company.
See to me they should be suing those previous executives and clawing back bonuses since they purposefully screwed over the long term health of the company. Of course though I have apparently crazy ideas.
I think its 70/30 split with what you said being the 70. However woth Sharma's background shes probably seen how much AI can save in replacing certain roles.
I wouldn't rate Phil Spencer too highly either, though. He was the face behind these massive buyouts in the first place. He set the strategy for Xbox's very lackluster console offering this generation. And he went all in on "You'll own nothing and like it" with GamePass.
The studios that Xbox spent so much money on don't appear to have really paid for themselves yet. With games being made at a glacial pace, you have not only the large sum of cash spent on the buyouts to worry about, but years of additional salaries, infrastructure, and services to pay before profit starts coming in. GamePass also appears to have been a major investment that hasn't quite paid off, what with them now denying new contracts to third party studios while they reevaluate its business model.
Now imagine how bad the other MS execs must be for Spencer to be considered the 'good one'.
His main value was acting as an insulating layer between Xbox and headquarters.
There's just a general downturn in the economy. People don't buy video games when they're struggling to pay for groceries.
That and MS probably wants to throw more into the AI money pit.
There's a trend on more spending on cheap entertainment during recessions and times of finacial hardship
https://en.wikipedia.org/wiki/Video_game_industry
It seems that they went a bit too far recently for price gouging, but you can do research on similar pre video game "amusments" like films and such and find similar patterns
Yeah, interestingly enough we are so reliant on cheap entertainment for presumably mental health reasons that we tend to make other cuts instead. That's why for example the Men's Underwear Index is actually a pretty good indicator of recession.
There's a much much bigger indy market now. I'm sure people will still be playing games, just not AAA games they can't afford on hardware they definitely can't afford.
It's a good time to have a few 1-5 year old PCs and some spare parts laying around to play games up to current Gen and future Indy games.
Batten down the hatches me matey. We will need to weather these seas with narry a port in the storm for the next few years.
The PC of Theseus will survive.
Re: edit - correct!
Xbox thinks their biggest competition is Fanduel, Kalshi, and TikTok…