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.