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.