A new report sheds more light on the situation at Xbox that led to the big news this week that Microsoft was cutting 3,200 jobs at the gaming company, divesting from studios, and making other cutbacks to "reset" the business.

Bloomberg reported that Microsoft spent "nearly $80 billion" in the past 10 years on deals to help revitalize Xbox and realize its dream for Xbox Game Pass, but those plans did not pan out the way Microsoft envisioned.

Xbox CEO Asha Sharma said this week that the big bets made under previous leadership--including Game Pass, acquiring studios, and putting its games on rival platforms--"did not grow at the pace we expected." Sharma said these efforts drove "meaningful value," but that wasn't enough with the growth piece.

To that end, Microsoft said in a filing from the Microsoft-Activision acquisition proceedings that it was aiming to have 77 million Game Pass subscribers by the end of fiscal year 2026. That was on June 30. What was the number of subscribers? 30 million, a source told Bloomberg, following reporting by The Wall Street Journal of the same number.

That's 4 million fewer subscribers than Microsoft itself reported in 2024.

"Growing concerned"

According to Bloomberg's sources, Xbox employees "had been growing concerned" that Game Pass subscriber numbers had peaked.

Xbox chief strategy officer Matthew Ball revealed in June this year that "millions" of people canceled their Game Pass subscriptions after the 50% price hike was announced in October 2025. Sharma brought the price down to $23/month, but that was still higher than it was a year ago ($20/month), and it's not actually the discount you think it is.

So what happened with Game Pass? One theory is that the Netflix model of paying one price to access a huge library of content didn't work in the context of gaming due to documented player behavior. Data from Circana shows that the majority of US gamers buy a maximum of two games per year. The suggestion here is that consumption patterns are very different between Netflix and Game Pass. To be sure, Microsoft never billed Game Pass as the "Netflix of games." Strauss Zelnick, the head of Take-Two, pointed out the difference between linear and interactive consumption in comments he made in 2021.

“Consumers who are involved with interactive entertainment have different consumption patterns than those involved with linear entertainment. Linear entertainment consumers consume something like 150 hours of programming a month. That’s probably well over 100 different titles. In the case of interactive entertainment, consumers are consuming something like 45 hours a month, and that may be one, two, three, four titles. But it’s certainly not 100 titles. So from a consumer point of view, it’s not clear that a subscription model really makes sense, for the bulk of consumers,” he said.

Zelnick said it makes no sense to release new games directly into a subscription service like Game Pass.

"Outside of the enthusiast core, few cared"

Circana analyst Mat Piscatella weighed in on the Game Pass situation, writing that Game Pass "failed" because Fortnite and other so-called "black hole games" taking up so much time, money, and attention. Beyond that, Piscatella observed that Game Pass was not appealing enough to the mass market audience.

"The problem with Game Pass wasn't the service itself but rather the goal of selling subs and services, as Microsoft was aiming for across its business at the time," he said. Call of Duty launched on Game Pass and did not significantly boost subs, and had little impact on hardware. And that was that."

$1 billion annually on third-party game deals

Also in the Bloomberg piece, it was reported that former Xbox president Sarah Bond was the leader of Xbox's Game Pass strategy. The report said Microsoft was spending $1 billion annually for third-party game deals to help convince people to sign up for Game Pass. Other efforts to expand Game Pass, like offering it to the massive PC player userbase and streaming markets, failed to catch on as well.

Regarding the $80 billion in spending in the past decade, this came from Microsoft's blockbuster acquisitions of Activision Blizzard ($75.4 billion) and ZeniMax ($7.5 billion), as well as the purchases of developers like Ninja Theory, Obsidian, and Double Fine. The idea, spearheaded by former Xbox executive Phil Spencer, was to ramp up the studio base to create more games that Game Pass members could play as part of their membership fee.

What's next for Game Pass?

But people inside and outside of Xbox questioned the economic realities of this approach. Sources speaking to Bloomberg said some Xbox staffers feared that putting popular, expensive-to-make games into Game Pass at launch "could devalue them and cannibalize individual, higher-priced copies."

While there were some success stories of developers seeing a lift in full-game sales after coming to Game Pass, that wasn't always true. Black Ops 6, the first new Call of Duty game to launch into Game Pass, reportedly missed out on $300 million in sales due to its inclusion on Game Pass. Piscatella pushed back against this number, saying it is "piracy math."

"That anyone that played via Game Pass was a lost sale--which isn't true--just as every pirated copy is not a lost sale and does not take into account sub revs. But whatever, minor quibble," he said.

Black Ops 7 launched into Game Pass in 2025, but this year's game, Modern Warfare 4, will be "windowed" for about a year. If people want to play it at launch, they have to buy it outright before it comes to Game Pass during the next holiday season.

Divesting studios

In terms of Microsoft saying goodbye to five development studios, Sharma said it is "neither possible nor desirable to own every great independent studio." She added that Microsoft has come to realize that, "We are not the best home for every type of studio." To make her point, she said that in a typical year, Microsoft lost 64 cents for every dollar it invested. Going forward, Microsoft has pledged that its spending on games will not decrease, but the company will instead re-focus and shift its spending to higher-priority areas with the highest likelihood of capturing a positive return on investment.

Double Fine and Compulsion Games are regaining their independence, while Ninja Theory and Undead Labs have been sold to unnamed buyers. Arkane Lyon, meanwhile, has entered into "consultation," pursuant to local labor laws in France, and this process will decide the fate of the studio and its new game, Marvel's Blade.

Microsoft laid off 1,600 Xbox employees this week, with another 1,600 people set to lose their jobs in the next year. The cuts were part of a wider pullback at Microsoft, which includes 4,800 total layoffs, amounting to about 2.1% of Microsoft's total global workforce.

Hitman and 007: First Light developer IO Interactive has confirmed that it is closing its Istanbul office, laying off staff in the process as part of cuts that the studio said were "necessary" to help the company stay afloat in the future.

IO said it made these cuts after Xbox dropped out of funding Project Fantasy, the company's mysterious upcoming RPG. IO has now "regained full ownership of the project and our IP" related to Project Fantasy, and IO will now fund it independently. However, this meant that IO had to pull back in other areas, including efforts for "external projects and potential mobile game derivatives."

"We had to find a new balance for the long-term future of the studio, focused on the success of our main internal core titles," IO said. "This has meant making changes as well as proposed changes across our studios: the closure of our Istanbul studio and starting a process to part ways with colleagues who have been a meaningful part of what makes IOI what it is."

Closing the Istanbul office and laying off staff were "hard, but necessary decisions" made to "retain the long-term future of IO..." The developer said its structure as a fully independent AAA developer and publisher is a rarity in the modern gaming landscape. Making the cuts also gives Project Fantasy "the best possible foundation to succeed under our own passion and direction."

In June, IO signaled that layoffs were coming due to Xbox pulling out of Project Fantasy, but this was the first confirmation of the details and the specifics regarding the closure of the Istanbul office.

In addition to Project Fantasy, many want to see IO make a sequel to 007: First Light after the game's critical and commercial success, but it remains to be seen if that will happen.

Microsoft stopped funding Project Fantasy as part of its renewed focus on the games and franchises it believes will make the most money. Microsoft said it is not reducing its overall investment in games, but what's changing is where the company is investing. Clearly, games like Project Fantasy, along with the next game from the creator of Assassin's Creed are not part of that vision. Xbox was also going to fund the next game from Naughty Dog veteran Bruce Straley before backing out.

For more, check out the story below:

• Xbox Layoffs, Studio Changes, And Spin-Offs: Everything Announced In Big Shakeup

Microsoft recently announced sweeping layoffs affecting 4,800 people, including 3,200 at Xbox alone. This is happening as part of a "reset" of Xbox, and this includes changes to the company's various subsidiaries, including Bethesda.

Bethesda boss Jill Braff said the cuts at Xbox "reflect the realities of our industry and business." She said Bethesda has a responsibility to ensure it is "operating from a more stable foundation." In addition to layoffs across the organization--Betheda's id Software, ZeniMax Online Studios, and Obsidian teams were hit particularly hard--Braff said Bethesda needs to rethink how it works and what franchises it focuses on.

"To be successful in the future, we need to change course,” Braff said in a memo to staff obtained by IGN. “We must strengthen our business, return to sustainable growth, and ensure we can continue investing in our franchises and our players. I know that doesn't make a day like today any easier.”

A fifth mainline Fallout game is among the upcoming projects at Bethesda.

Braff did not get into specifics, but said Bethesda will now shift "from a planning model primarily centered on what's next for each independent studio to one that focuses on our strongest franchises and determining the content roadmap that best serves our players and Bethesda as a whole.”

Braff went on to say that Bethesda's teams will now focus on "the opportunities with the greatest potential."

One of those projects is no doubt The Elder Scrolls 6, which is the next project from Bethesda Game Studios. The Fallout franchise is also particularly popular, with fans eager for Fallout 5. In June, a report said Microsoft was looking to increase its investment in some of Xbox's biggest franchises. The report singled out The Elder Scrolls, Fallout, and Halo, and said the aim was to speed up development on these projects.

Microsoft's dramatic cuts to Xbox are the result of "catastrophic mismanagement" by Microsoft leadership as it chase the AI trend, some are saying.

Exactly a month ago, State of Decay 3 re-emerged at the Xbox Games Showcase with a new gameplay trailer promising a 2027 release window--plus the game's inclusion on Xbox Game Pass. But the open-world survival game might not arrive on Microsoft's subscription service after all. 

Game File reports the company acquiring developer Undead Labs is under no requirement to put State of Decay 3 on Xbox Game Pass. The deal between Microsoft and the unknown purchaser doesn't contain "any Xbox-controlling terms," like being on the subscription service. That would take back what was stated when State of Decay 3 resurfaced last month, as the game was announced for PS5 and Game Pass. 

https://www.youtube.com/watch?v=eoLOzgHvKxQ

Yesterday, Xbox released details about Undead Labs and Hellblade developer Ninja Theory being sold off to mysterious buyers. Game File notes we might learn about the company acquiring Undead Labs later this summer. Meanwhile, there are massive layoffs at Xbox, and Double Fine as well as Compulsion Games have once again gone back to independent studios. There were also job cuts at Id Software and ZeniMax Online Studios. 

State of Decay 3 is set to feature shared worlds for up to four players, with a larger map than what was experienced in State of Decay 2. You can also sign up for alpha playtests on the State of Decay 3 website. 

The Best Xbox Game Pass Games In 2026 View Images

If you've already cleared Resident Evil Requiem several times over, Fright Train may be the next game to consume you, particularly if you're also a fan of Five Nights at Freddy's.

Fright Train combines the third-person gunplay and inventory management of the former with the mascot-style characters of the latter, and wraps it all up in a roguelite structure aboard a doomed train crossing Antarctica.

GameSpot can exclusively reveal Fright Train's release date: It's coming to PC on September 15, and you can watch a trailer below if its mash-up of horror tastes intrigues you.

Fright Train stars an anthropomorphized dog/agent, the appropriately named Doug Barker, who will need to balance keeping the train cars clear of monsters with keeping the train itself running smoothly. It seems he's having a ruff time.

It also features enemies with behaviors that "intertwine" and lived-in environments full of interactable objects, signaling how savvy players can take advantage of their situation to survive deeper and deeper in the roguelite structure. 

The horror game comes from WildArt Games, an indie team that recently put out 2025 under-the-radar horror gem Caput Mortum. It's also being published by Black Lantern Collective, a fairly new label focused specifically on horror games. 

Look for the horror game to hit PC on September 15, or check out Fright Train on Steam to see more.

30 Best Horror Games To Play In The Dark In 2026 View Images

The recent layoffs at Microsoft, including deep cuts at Xbox, impacted 4,800 people across the business. One of the staffers let go was Kevin LaChapelle, a 37-year Microsoft veteran who helped bring to market one of the best, most-beloved features in Xbox console history: backwards compatibility.

LaChapelle, who was the vice president of the Xbox platform, confirmed on LinkedIn that he was part of the cuts. He started at Microsoft in 1989 as a software designer engineer, and moved to different parts of the business over the decades.

He started working on Xbox during the Xbox 360 days and later became a software engineering manager where he led the team responsible for delivering the popular backward compatibility program on Xbox One. This was the popular feature, announced at E3 2015, that allowed Xbox One owners to play Xbox 360 titles on the newer platform and later Xbox Series X|S as well.

"Sitting in the auditorium when Phil announced the program at E3 2015 was incredible. The audience's reaction was unbelievable," he said.

https://www.youtube.com/watch?v=cCGKATko82U

An update in November 2021 that added 70+ games, including original Xbox and Xbox 360 games, was the final update to the backwards compatiblity catalog.

After that, LaChapelle became the vice president and general manager for xCloud, which would become Xbox Cloud Gaming. In that role, he led the team from conception to launch, and LaChapelle is still a big believer in streaming for games.

"I am a firm believer that all entertainment will eventually become streamed to you wherever you are. I look forward to watching how Xbox evolves going forward and I wish the team nothing but success," he said.

One of the reasons Microsoft is making these cuts is because some of its strategic bets, including Xbox Game Pass, did not work out. Part of the reason why, experts said, was because Microsoft failed to convince PC and cloud users to sign up for Game Pass.

The 4,800 layoffs at Microsoft amounted to about 2.1% of the company's global headcount. At Xbox specifically, 1,600 people lost their job this week, with another 1,600 set to be laid off in the next year, Microsoft said.

In addition to layoffs, Microsoft is divesting of at least five studios. Ninja Theory and Undead Labs have been sold to unnamed buyers, while Compulsion Games and Double Fine are going independent again. Arkane Lyon has entered "consultation" under French labor rules, and that process will decide the fate of the developer and its in-development game, Marvel's Blade.

In the wake of mass layoffs at Xbox and several studios exiting the company, Microsoft's gaming division has outlined it plans for growth. Some of these plans include a focus on its biggest IP, investing more in games like Minecraft, and removing several layers of management to streamline its studio model. One other major area of focus will be on Xbox hardware itself, as the company says its flagship console represents 80% of its current business.

"In order to grow, we made a bunch of bets--and as we did that, we inherently didn't focus on the core business," Xbox CEO Asha Sharma said to Fortune. "The number one measure of your strategy is what you put your resources behind, and we simply spread ourselves too thin. A healthy Xbox could weather the shock of the hardware crisis. With an unhealthy Xbox, it becomes really challenging, and it accelerates a lot of the changes we need to make."

https://www.youtube.com/watch?v=4FatSqS3VYY

If Xbox is going to focus more on its hardware, then it's doing so in an industry that's grappling with sharply increased costs and component shortages. This shift also comes during a time when Xbox hardware revenue has dipped by a shocking 33%--per Microsoft's latest financial report--and several price hikes on the Xbox Series X|S have only added to the company's woes. The Xbox Series X 1TB model now retails for $800 (it was originally $500 when it launched), while the Xbox Series S has shot up from its launch price of $250 to $500.

A second increase is also looking likely, and the next-gen console Project Helix will likely also be extremely expensive.

One method that Microsoft is reportedly looking at to cut down on costs is to forego the disc drive on Project Helix. Xbox rival Sony has already confirmed that it will not support PlayStation discs after 2028, and it's rumored that the PS6 won't have a disc drive either. Microsoft is reportedly working on a disc-to-digital feature that would enable users to bring their physical library with them into the next-gen, with the program said to support both Xbox One and Xbox Series X|S games.

Meanwhile, Microsoft's Xbox restructuring hasn't been the subject of criticism across the games industry--a case of "catastrophic mismanagement," as one expert has described the news. With 3,200 people being laid off--roughly 20% of the Xbox workforce--the changes will also see Double Fine and Compulsion become independent studios, Ninja Theory and Undead Labs have been sold, and Arkane Lyon has entered a mandatory consultation period to figure out what's next for the Marvel's Blade developer.

Microsoft's mass layoffs had a heavy impact on the Xbox division, and Obsidian Entertainment, the studio behind The Outer Worlds, is one of many Xbox-owned studios where cuts were deep.

Kotaku reports that between 60 and 70 people--roughly a quarter of the studio's workforce--have been let go. The talent laid off includes producers, QA testers, artists, and many others spanning different disciplines.

Senior talent was not spared in the cuts, with Kotaku saying that some laid off were with the studio for over a decade. Others affected include the art director for The Outer Worlds and the studio's lone recruiter. Despite the cuts, it is said that work will commence on Grounded 2 and planned DLC for The Outer Worlds 2, but any plans beyond that are currently unknown.

Obsidian has a storied history: Founded in 2003, the Irvine, California-based studio became known for Star Wars: Knights of the Old Republic 2, Fallout: New Vegas, and South Park: The Stick of Truth. Microsoft bought the studio in 2018 as part of an acquisition spree, and the studio has since shipped games including Grounded, Pentiment, and Avowed.

2025 was massive for Obsidian, as it released Avowed, The Outer Wilds 2, and Grounded 2 (in early access) all in the same year--but Obsidian studio design director Josh Sawyer said earlier this year that the triple release was due to poor planning and resource mismanagement, or in Sawyer's words, "the result of things going wrong." It's said that Obsidian will continue making games set in the Avowed universe, but a third entry in The Outer Worlds series is not on the docket.

Meanwhile, Xbox layoffs also hit Id Software, Bethesda Game Studios, and ZeniMax as a whole. These cuts are part of Xbox's initial wave of 1,600 layoffs, with about 3,200 total layoffs expected throughout Microsoft's fiscal year. Microsoft is cutting about 4,800 positions across the entire company--roughly 2% of its entire workforce.

Amidst a lot of bad news at Xbox this week--including its CEO mentioning how Game Pass hasn't exactly paid off-- the company has also revealed the first wave of titles being added to the Game Pass library in July 2026. This month's new additions run across a wide variety of genres, and a day-one release is also mixed among them. Here's a closer look at everything that's on the way, which platforms these games will be available for, and which tier of Game Pass you'll need to play them.

Available today, Winds of Arcana: Ruination follows the protagonist Aryn and his comrades as they explore a broken world in this 2.5D action Metroidvania. With plenty of peril along the way, players will have to wield magic and power up as they uncover ancient mysteries. July 9 will see two more games go live on Game Pass--Gears of War: Reloaded and Tamashika. The remake of the very first Gears of War game will now be available through Game Pass Premium--it's already available through Game Pass Ultimate and PC Game Pass--while Tamashika is a fast-paced arcade-style corridor-shooter where you have to lock in and react quickly while the world changes around you.

Starting July 13, there'll be a new game released daily on Game Pass for almost a week. Things kick off with the day-one launch of the time-bending Hades-like Ascend to Zero, and it'll be followed by PBA Pro Bowling 2026, the harsh action of Quarantine Zone: The Last Check, the sporty multiplayer game Mavrix, and the co-op extraction platformer FixForce. You can also look forward to Fogpiercer, a sci-fi roguelike deckbuilder that tasks you with choo-choo-choosing the right course of action when your train comes under fire from bandits looking to derail your adventure.

Rounding out the first wave of Game Pass in July is the open-world base-building game The Planet Crafter, and maybe you can pretend to be Superman in Tony Hawk’s Pro Skater 1 + 2. Several games will also receive updates in July, with the most notable one being the 1.0 release of Palworld. There'll be new locations to explore and new characters to meet as the hit survival and crafting game.

At the same time, you can also expect to see several games exit the Game Pass service this month. A total of 11 games are on their way out, with some of the noticeable departures being Golf With Your Friends, Stellaris, EA Sports FC 24, PowerWash Simulator, and Shadow of the Tomb Raider. 

Xbox Game Pass July Wave 1 Additions July 6

Winds of Arcana: Ruination (Cloud, Console, Handheld, and PC) - Game Pass Ultimate, Game Pass Premium, PC Game Pass

July 9

Gears of War: Reloaded (Cloud, Xbox Series X|S, Handheld, and PC) - Now with Game Pass Premium; joining Game Pass Ultimate and PC Game Pass

Tamashika (Cloud, Xbox Series X|S, Handheld, and PC) - Game Pass Ultimate, Game Pass Premium, PC Game Pass

July 13

Ascend to Zero (Cloud, Xbox Series X|S, Handheld, and PC) - Game Pass Ultimate, PC Game Pass

July 14

PBA Pro Bowling 2026 (Cloud, Xbox Series X|S, and PC) - Game Pass Ultimate, Game Pass Premium, and PC Game Pass

July 15

Quarantine Zone: The Last Check (Cloud, Xbox Series X|S, and PC) - Now with Game Pass Premium; joining Game Pass Ultimate and PC Game Pass

July 16

Mavrix by Matt Jones (Cloud, Xbox Series X|S, Handheld, and PC) - Game Pass Ultimate, Game Pass Premium, PC Game Pass

July 17

FixForce (Cloud, Xbox Series X|S, and PC) - Game Pass Ultimate, Game Pass Premium, PC Game Pass

Fogpiercer (PC) - Game Pass Ultimate, PC Game Pass

July 21

The Planet Crafter (Cloud, Xbox Series X|S, and PC) - Game Pass Ultimate, Game Pass Premium, PC Game Pass

Tony Hawk’s Pro Skater 1 + 2 (Cloud, Console, and PC) - Game Pass Ultimate, Game Pass Premium, PC Game Pass

The Best Xbox Game Pass Games In 2026 View Images

1 Billion DAU!

Following the announcement that Xbox will cut its workforce by 20%--with 1,600 employees already laid off in the first wave of retrenchments--Xbox CEO Asha Sharma has detailed plans for the company to reach an absurd number of people every day.

"I want Xbox to be one of the few companies that entertains more than a billion people each day and gives everyone the opportunity to create and connect. I know we can achieve this goal. Xbox has many of the most beloved franchises in entertainment history, talented studios around the world, and we will return to growth in 2027," Sharma wrote in a blog post about the "restructuring" of Xbox.

Reaching 1 billion people per day is a massive number, but is it feasible when Xbox will be operating with fewer studios and people? That would account for roughly one in every eight people daily, and a large chunk of the world's population doesn't have access to Xbox services, probably aren't too concerned with the company to begin with, or aren't in a position to jump on the Xbox bandwagon--how many infants have you seen in a Call of Duty lobby lately?

The key here is the wording behind Sharma's statement, as she wrote that she wants Xbox to entertain a billion people per day, not 1 billion Xbox players. That leaves a lot of room for interpretation, and mobile gaming will likely be expected to do a lot of the heavy lifting for Xbox going forward. Candy Crush developer King will report directly to Sharma as part of the Xbox restructuring, and Minecraft studio Mojang will also have a direct line to the CEO.

While exact numbers are hard to come by, previous reports have indicated that Minecraft and Candy Crush still have sizable daily active users. Back in 2021, Minecraft reached a milestone of 140 million monthly active users, and that userbase has likely remained high thanks to the release of the blockbuster Minecraft movie. Candy Crush has been downloaded billions of times over the years, but according to Sensor Tower, the game has around 26 million people playing it daily.

Even at their peak, Minecraft and Candy Crush combined aren't anywhere close to the lofty DAU number that Sharma is aiming for. Of course, numerous other games on Xbox still have dedicated players, but even when bundled in and including their availability on multiple platforms, they're not going to be moving the needle much closer to the 1 billion mark. Including third-party games in the calculations--think Fortnite alongside Microsoft heavyweights like World of Warcraft and Sea of Thieves--does add to the player tally, but these games are far from their peak years, which saw millions of monthly active users.

To put this into perspective, Steam's record for the highest number of concurrent users is 42.6 million people. Considering that Steam is the largest PC platform currently, Xbox would be aiming to do 23 times better than Valve's PC gaming platform on its best day. Across its gaming ecosystem, Microsoft reported in 2025 that it had 500 million monthly active users across PC, console, mobile, and cloud. How it plans to reach double that figure and achieve it on a daily basis is unclear.

Especially when we don't even know what Xbox means when it says it wants to "entertain" 1 billion people every day. While Sharma's goals are ambitious, they don't seem realistic either.

Next year will mark the 10th anniversary of the original Nintendo Switch, which remains in active production despite the debut of Switch 2 in 2025. However, the Switch's time will be coming to a close in Europe just shy of a decade after its initial release.

According to a notice on Nintendo's official site, the Switch, Switch Lite, and Switch OLED will no longer be available to European retailers after mid-February 2027. Nintendo Store will also stop carrying the original Switch models for European markets in that same month.

Nintendo hasn't signaled when the Switch will be retired in North America, but the company had a greater incentive to shut it down in Europe first. The European Union passed a new regulation that requires Nintendo and other console makers to ship products that allow users to change their own batteries. Changing the design of the first Switch to allow owners to change its batteries wouldn't be very cost-effective, given it was already near the end of its lifetime. So Nintendo discontinued it instead.

However, Nintendo will comply with Europe's Right to Repair directive and begin releasing Switch 2 consoles with replaceable batteries as soon as this summer. Nintendo has indicated that these new models are virtually identical to the Switch 2 console that's already on the market. While those plans are in motion, Nintendo added that "Due to a variety of factors, revised products may not become available in all European countries simultaneously." Presumably that means the ongoing memory and component shortages may slow down the pace of that rollout.

Given Sony's recent decision to stop releasing games on disc, Switch 2 is one of the few remaining consoles that still uses physical media. Regardless, Nintendo has leaned more heavily on Game-Key Cards for its current generation of third-party titles on Switch 2, much to the annoyance of games preservation activists.

Diablo 4 Season 14 dramatically reworked Mythic items in Blizzard's ARPG going forward, and judging from early feedback, it's a change that isn't going over well.

Season of Death Awakening launched on June 30 and introduced what Blizzard coined Mythic Uniques 3.0, a new system where any of the game's hundreds of Unique items could be found (or turned into) even stronger Mythic versions. In theory, it would open up the game's endgame build options and give players more choices when it comes to outfitting their characters. Far from just a temporary seasonal change, Blizzard stated it intended for Mythic Uniques 3.0 to be a permanent part of the game going forward.

The downside of the new system is that it also added more randomness to Mythics, making it so even formerly best-in-slot Mythic Uniques (now called Iconic Mythics) like The Grandfather or Heir of Perdition are now, more often than not, significantly worse than before and usually not worth using. Equally annoying, crafting a Unique into a Mythic Unique using the Horadric Cube is largely random, rewarding a different item than the one originally put in the cube.

https://www.youtube.com/watch?v=Nuu7aOAw0is

Mythics additionally seem to be more rare than before, with lower drop rates and the removal of the ability to craft specific Mythics. Taken all together, acquiring usable Mythics now feels almost entirely out of players' control. 

Blizzard knew the Mythic item changes would be controversial. In an interview with GameSpot ahead of Season 14's launch, Blizzard said it was trying to "split the difference" between its goals for the game's "long-term health" and feedback from the community it received on the Season 14 public-test-realm. It seems that approach isn't going particularly well, because one look at places like the Diablo 4 Reddit or at videos from various Diablo content creators paints a picture of a largely unhappy playerbase frustrated by the season's unpopular Mythic changes.

In a widely upvoted post, Reddit user Oct_ showed a screenshot of having achieved rank 1 on the Hardcore, Solo-Self Found Diablo 4 leaderboard. However, they lamented the fact that they'd played for nearly 50 hours and had not found or been able to craft a single usable Mythic yet. 

"The mechanic makes it impossible for normal people to get that chase item," Oct_ wrote.

Another Reddit user, Thirteenera, provided some data on Mythic Unique drop rates and revealed that after "days" of farming 1,400 lair boss runs, they received a total of 50 Mythic items. Of those 50 drops, none were useful for their build. While many Iconic Mythics were once universally useful across most builds, most Mythic Uniques are now niche in their purpose, meaning finding one that is useful for a given build is now far less likely.

https://www.reddit.com/r/diablo4/comments/1unouef/upgrading_to_mythic_seems_pointless_if_its_not/

Others have called out how bad and misleading it feels to put a Unique item into the cube, use the "upgrade" feature (which implies the item is being improved), and then receive a completely different, and likely useless item in exchange. Many players state the phrasing needs to be rewritten to let players know they aren't really crafting an upgrade but gambling.

It's not just on places like Reddit that players are complaining. Diablo content creators like Rhykker also don't seem happy with the changes. Rhykker said they are having fun with the new seasonal events, but that "everything I loved about Mythics is gone."

"Mythics are harder to get and weaker than they were," Rhykker said in a recent video. "I'm okay with harder to get, but it doesn't feel exciting to work harder to get something crappier than we used to have." 

https://www.youtube.com/watch?v=aEtj56ctcMI

Another content creator, Rob2628, stated in their most recent video that Season 14 is a "big step backwards," lamenting the fact players can only wear one crafted Mythic item, how difficult it is to find Iconic Mythics, and the sheer amount of RNG involved along the way. 

"I think the general consensus is that the new changes to the Mythics, especially with the crafted tag, have been very negatively received in the community, and I agree, rightfully so," Rob2628 said. "It is very, very hard to get Mythics, even for players that play a ton."

That's not to say everyone dislikes Mythics 3.0. Another popular Diablo content creator, Raxxanterax, said in their recent "The State of Diablo 4 Season 14" video that they are a fan of Uniques being able to drop as Mythic quality, even if he is largely unimpressed with the season overall and thinks Blizzard needs to change its approach to seasons.

"I think it adds dopamine," Raxxanterax said.

Season 14 is still in its early stages, so it's possible Blizzard could adjust drop rates or make changes to Mythic crafting to elminate some of the pain points players have complained about before the end of the season. Even if the new season isn't being received well overall, there have been some universally good changes, like fixes to make Diablo 4's worst grind a lot easier.

Microsoft has announced sweeping layoffs and other dramatic changes resulting in 4,800 layoffs across the company, including 3,200 at Xbox specifically. What's led to this? According to one expert, Microsoft CEO Satya Nadella and his "catastrophic mismanagement" of the company is to blame.

Ed Zitron, an author who specializes in covering the technology space and is the CEO of EZ Primary Research, offered a blistering take on Microsoft's management in response to the mass layoffs.

"Catastrophic mismanagement by a company run by a sub-McKinsean imbecile that hires other losers to move money around to hide how bad his AI plays are. Microsoft is a disgrace to the software industry," he said.

Zitron has been an outspoken critic of elements of AI in particular, recently appearing on CNBC to offer the bear case against generative AI.

"One of the biggest lies of the AI bubble is that Microsoft, Google, Amazon and Meta are 'growing because of AI,'" he said recently. "In reality, they're using the continued growth of their other business units to cover the meager returns from AI, and the massive waste of their trillion+ in capex."

Microsoft, of course, is massively invested in AI, and Zitron appears to be suggesting here that some of the issues that led to these dramatic cuts at Xbox are in some ways tied to Microsoft's AI plays.

In its statement today addressing the cuts, Microsoft said it is laying off thousands of people because the world is changing and Microsoft is attempting to adapt. Microsoft also pushed back against the theory that the roles eliminated today are being replaced by AI, though the company did admit that, "AI is changing how work gets done."

Investors tend to reward companies that cut costs, but that doesn't appear to be the case this time with Microsoft, as the company's stock price is down today. That continues a trend for Microsoft, as shares are down 18% year-to-date and 22% in the past year.

The cuts to Xbox include not just staff layoffs, but also Microsoft divesting of five development studios. Double Fine and Compulsion are regaining their independence, while Ninja Theory and Undead Labs are being sold. Arkane Lyon, meanwhile, is in the "consultation" process to determine its fate and the fate of Marvel's Blade.

Xbox CEO Asha Sharma has shared new details on the significant changes at Xbox, including mass layoffs, studio spinoffs, and more.

In an interview with Fortune, Sharma said Microsoft undertook "a bunch of bets" years ago to help grow the business, including Game Pass, going multiplatform, and beefing up its studio base. These bets did not pay off, and in the process of pursuing these new ventures, "We inherently didn't focus on the core business," Sharma said.

"The number one measure of your strategy is what you put your resources behind, and we simply spread ourselves too thin," she said.

Asha Sharma is making major cuts to Xbox.

In a memo to staff, Sharma said the Xbox business, as it stands today, is not in a healthy place. If it were, Sharma said the company would be able to "weather the shock of the hardware crisis" that Xbox is facing now due to the AI-fueled run on components and memory.

"With an unhealthy Xbox, it becomes really challenging, and it accelerates a lot of the changes we need to make,” Sharma said.

The restructuring of Xbox is part of a "reset," and a big part of that is downsizing. About 1,600 people at Xbox are losing their jobs today, with another 1,600 cuts to come throughout the next year. Additionally, Microsoft is spinning out Double Fine and Compulsion, and selling off Ninja Theory and Undead Labs, though the buyers for those companies have not been confirmed as of yet. Another studio, Arkane Lyon, is in the "consultation" process and that will seemingly determine the fate of the studio and its in-development project, Marvel's Blade.

The layoffs didn't just hit Xbox, as Microsoft is laying off staff across the entire company, with some 4,800 positions (about 2% of the company's workforce) affected in the latest round of cuts.

With the Steam Machine starting to land in some lucky buyers hands, a few of the gremlins in Valve's compact living-room PC have started to surface. But while some might remind you of infamous hardware failures of old, many of them are smartly designed errors that you can, for the most part, resolve yourself.

Last week, the Steam Machine subreddit was rocked with what the community described as the "Red Line of Death," a reference to the catastrophic Red Ring of Death that plagued early Xbox 360 units. The users in question seemed to think the Steam Machine in question was bricked and beyond repair, but a few resets and some BIOS updates later, the PC was restored. Perhaps most interesting was how it surfaced the smart way in which Valve is relaying vital hardware information when something does fail.

The error this unfortunate Reddit user encounterd was probably the worst of the lot, with the half width, breathing red LED bar indicating a GPU failure. Different bar widths with different animations point to entirely different issues, however. Our own Steam Machine usage has run into another error, where the Steam Machine displayed a full, solid red bar, indicating an overheating issue.

Steam support has a full page breaking down the meanings of different light bar colors and animations, and what they're telling you about the state of your Steam Machine. While some less crucial ones will be overwritten by your custom light bar settings, ones paired with critical errors will always be displayed. They give you an easy way to communicate what might be wrong with your Steam Machine should you need to contact support, which many of the worst issues suggest you do.

Valve's Steam Machine went on sale last month, with a starting price of $1050. It's a price that Valve itself wasn't happy with, but explained that its increase was similar to the recent Steam Deck price hike that was similarly drive by the ongoing memory crisis.

A deadly plague spread through World of Warcraft's Moonguard server over the weekend, making it the second time in WoW history a horrific virus has run uncontrolled through the game's populace.

As broken down by Wowhead, the origin of the plague in question comes from a Dragonflight dungeon, Brackenhide Hollow. Within the dungeon, some enemies cast a spell called Withering Contagion, a disease that inflicts heavy nature- damage-over-time and spreads to all players within five yards. 

Whether by accident or intentionally, a player was able to bring Withering Contagion out of the dungeon and into the heart of Alliance territory and Silvermoon City. Lower-level players were quickly killed by the contagion's damage-over-time effect, while those who survived only helped spread it even further.

Before long, areas like Stormwind and the Goldshire inn in Elwynn Forest were awash in green slime, as players started to document the pandemic on social media. The virus was brought to an end thanks to a July 3 hotfix from developer Blizzard, but not before the virus had rampaged unchecked for several hours.

https://www.reddit.com/r/wow/comments/1umpgxh/corrupted_blood_20/

Players have quickly started referring to this most recent super-spreader event as "Corrupted Blood 2.0," a reference to the previous time WoW servers were hit by an uncontrollable plague. Way back in 2005, a similar scenario played out with the release of the game's 1.7.0 patch and its introduction of the Zul'Gurub raid. The raid's final boss, Hakkar the Soulflayer, used a unique Corrupted Blood mechanic that would spread to players within the encounter. 

Though Corrupted Blood was intended to stay within the raid instance, it snuck its way out via a bug that allowed it to remain on a Hunter's pet. When that pet was summoned in a populated area, Corrupted Blood quickly spread among Azeroth's citizens, killing players and even spreading to invincible NPCs, who then passively continued to spread it to others. The in-game "event" went on to be studied by real life contagious disease experts and even has its own Wikipedia page.

https://bsky.app/profile/meggoart.bsky.social/post/3mpr5jf64bc2m

Thankfully, this new plague wasn't nearly as deadly or disrupting as Corrupted Blood, which took Blizzard weeks to handle. Instead, Blizzard was able to quickly hotfix Withering Contagion within hours, sparing players from having to quarantine in Azeroth over the July 4th weekend.

In other WoW news, Blizzard continues to take aim at private servers it alleges are making millions illegally, while an alleged leak may have revealed Blizzard's big plans for the future of Warcraft.

Microsoft is undergoing a major shakeup that involves mass layoffs, studio sell-offs, and other significant changes as part of a "reset" of the business.

While we have learned that Ninja Theory and Undead Labs are being sold off and Double Fine and Compulsion are going independent, we don't yet know what the future holds for Arkane Lyon and its long-in-development Blade game. The French studio is undergoing "consultation," but its fate has yet to be determined.

There is a lot we still don't know, but for now, here's everything you need to know about Arkane Lyon and Marvel's Blade leading up to the news today.

Entering consultation

Arkane Lyon is based in France, and due to local labor laws, the studio is entering "required consultation" with its local Works Council. This process will include a "review of potential strategic options."

But there is a lot we don't know.

Could Arkane Lyon be sold off like Ninja Theory and Undead Labs? Go independent like Double Fine and Compulsion? Shut down like its sister studio Arkane Austin before it? Also unknown is what will happen with the Blade game itself. Microsoft said in its announcement that no publicly announced first-party games are being canceled in the "reset" process, but if Arkane Lyon is sold, it's anyone's guess as to what may happen to the project. Disney, which owns Marvel, would presumably be involved in these negotiations as well.

Arkane founder jokes about buying the studio

Arkane co-founder Raphael Colantonio, who no longer works there, responded to Sharma's post to ask about how much Arkane might cost to buy.

"Regarding Arkane... how much? I'm asking for a friend," he said, with a laughing emoji.

https://twitter.com/rafcolantonio/status/2074142859666551185 Delayed and over-budget, apparently

A report from The Verge said Marvel's Blade was over-budget and had been delayed internally. The game was said to be eyeing a 2026 release but was delayed internally to late 2027. That's all the info the report had to share, but it came after Blade was a no-show at the Xbox Games Showcase in June.

https://www.youtube.com/watch?v=wB9ye56mSfk Announced in 2023 and not much to show

Blade was announced in December 2023 at The Game Awards that year, but the reveal trailer was CG and many believed it was more of a mood piece meant to hype fans up and help developer Arkane Lyon recruit staff to work on it.

Game director Dinga Bakaba mentioned on stage that it’s a third-person action-adventure game that takes place in Paris. No gameplay footage has been released.

Prior to developing Deathloop, Arkane Lyon worked on both Dishonored and Dishonored 2. The studio certainly has a knack for world-building and level design, and it will be interesting to see how that is applied to a well-established universe.

A Blade film starring Mahershala Ali has been in the works for a long, long time, suffering multiple setbacks throughout its troubled development.

As part of the 1,600 people being let go by Xbox during its big reset on July 6, it appears that the company's Accessibility division has been hit pretty heavily as well.

According to a now-deleted July 6 Bluesky post, a senior user researcher for accessibility at ZeniMax Media shared that they were caught in the blast zone, too. They also revealed that the "accessibility staff overall seems heavily impacted," with "multiple people on the Bethesda User Research Team" getting laid off.

On LinkedIn, the researcher reshared a post by Zach Clothier, the accessibility test lead for the Microsoft gaming accessibility testing service, who announced his departure after nearly three years in his role.

It's unclear how many other people have been affected, but according to that now former ZeniMax Media senior researcher, it sounds like the team has been decimated amidst these layoffs. This comes during Disability Pride Month, which is supposed to honor the history, achievements, and experiences of the disability community.

A Microsoft spokesperson told GameSpot over email that despite the restructuring, the company plans to continue its work in making gaming more accessible for all.

"Accessibility remains a priority for Xbox," the spokesperson said. "While we've made changes across the team, creating more accessible gaming experiences for players has not changed."

Xbox's Accessibility Team is responsible for some wonderful features and technologies that make gaming easier for all players. This includes things like the Adaptive Controller and its various attachments, as well as accessibility options in games such as Forza Horizon 6 to change everything from the way it looks to the way it plays.

1,600 people will lose their jobs on July 6, while another 1,600 will lose their jobs over the next 12 months. These cuts make up about 20% of Microsoft's staff. Some studios have been cut loose, with Ninja Theory and Undead Labs being sold to a mysterious buyer. Meanwhile, the fate of Arkane Studios is still unknown, and both Id Software and ZeniMax have lost staff so that those studios could shift toward focusing on bigger franchises.

Xbox CEO Asha Sharma has outlined her plan to "reset" the Xbox business, and it includes mass layoffs and selling off studios.

In her memo announcing the dramatic shakeup, Sharma also talked about what led to this moment, and one piece is that the Xbox business is "not healthy" due in part to big bets that have not paid off, like Xbox Game Pass.

Xbox is undergoing a strategic "reset."

She said Microsoft bet on things like Xbox Game Pass, releasing more titles on competing platforms, and a "broader portfolio of content" to help grow Xbox. Those efforts did indeed create "meaningful value," she said, but a publicly traded company like Microsoft is focused on endless growth--and those businesses "did not grow at the pace we expected."

"As that happened, our core business weakened, and we added more teams, more investment, and more time, hoping for a better outcome. And now the industry is facing the most severe hardware crisis in its history," she said.
"We must reset Xbox."

Xbox Game Pass, launched in 2017, was a breakthrough, Netflix-like offering from Microsoft promising subscribers all first-party Xbox games and a growing library of other titles for a monthly subscription price. The membership proved popular, reaching more than 34 million subscribers. But all the while, many fans and experts like have questioned the viability and sustainability of the subscription model.

Strauss Zelnick, the head of GTA 6 parent company Take-Two, has said launching new games into a subscription service like Microsoft does makes no sense.

In 2025, Microsoft controversially raised the price of Xbox Game Pass Ultimate by a whopping 50%, bringing it up to $30/month. This price hike led to a mass exodus of subscribers, and Microsoft later brought it down to $23/month. A

At the same time, Microsoft announced a big change for Game Pass with new Call of Duty games no longer included with the service at launch. Game Pass Ultimate is still more expensive than it was a year ago, and the lower rate is not actually the discount people think it is.

In her memo, Sharma did not provide any specifics on how Xbox Game Pass could change further in the future. The executive specifically calling it out as a bet that did not fully pan out is leading some to believe further changes could be afoot. As for Microsoft's plans for releasing games on rival platforms, Sharma has backed away from that in some ways already by returning to situational exclusives like Gears of War: E-Day and Clockwork Revolution. These games are being sent out to die as exclusives, one expert said.

Finally, regarding Sharma's line about investing in a "broader portfolio of content" being a bet that did not pay off, she said Microsoft will now shift its investment on "higher priority projects" that have the best chance of succeeding (though she did not name any outright). No first-party Xbox games that have been announced have been canceled as part of the "reset."

It's a bleak Monday for Xbox, as the division is losing five of its studios and approximately 20% of its workforce will be laid off throughout the current fiscal year. These changes, referred to as "the most significant restructure in Xbox history" by Xbox boss Asha Sharma, will impact every corner of the business, including Id Software and ZeniMax Online Studios. While the two developers aren't shutting down, reports claim that they will be losing large portions of their respective workforces.

According to Bloomberg's Jason Schreier, a "significant" number of staff have been let go, as part of the initial wave of 1,600 layoffs today. Microsoft plans to shed another 1,600 Xbox employees in the months to come. Something Wicked Games CEO--and former Bethesda Studios project lead--Jeff Gardiner has also claimed that Id Software has lost 95 employees, while Bethesda Game Studios laid 35 of its workers off today.

https://bsky.app/profile/jasonschreier.bsky.social/post/3mpydldy43226

In an open letter, Sharma briefly mentioned that Xbox will focus on higher-priority projects at its studios, including Bethesda and ZeniMax. Schreier reported that the two studios won't just be focused on Fallout and The Elder Scrolls, but will also continue to work on IP like Wolfenstein, Doom, and Quake.

As the Xbox reset continues, Sharma also mentioned that none of its first-party publicly announced games or projects would be canceled as part of the reductions. According to the wording, InXile Entertainment's Clockwork Revolution and The Coalition's Gears of War: E-Day, while Senua and State of Decay 3 from departing studios Ninja Theory and Undead Labs are also still on track to be released.

The status of those games could change when the new owners of those studios take over, and the future of Marvel’s Blade at Arkane Studios also seems murky for now.