Xbox Game Pass June 2026 Wave 2 Lineup Announced

According to Bloomberg, Compulsion, Ninja Theory, and Double Fine aren’t the only Microsoft studios currently negotiating with Xbox to try to avoid closure, either. There is the potential for some or all to buy their way to independence, although that would likely come alongside layoffs, too.

Following Sharma’s “reset” warning, one analyst told IGN “the studios most exposed are brilliant for prestige and rotten for the spreadsheet.” Microsoft was then said to be speeding up development on new The Elder Scrolls, Fallout, and Halo games as it considered restructuring or even spinning off its gaming branch.

Sharma’s ground-shaking memo revealed that Microsoft’s gaming business currently has a 3% accountability margin (assumed to mean profit margin), which is down year-on-year. “Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform, and hardware subsidy, but our annual revenue has declined nearly half a billion during that time. Going forward, this cannot continue,” Sharma said.

Xbox Games Series Tier List

Xbox Games Series Tier List

Following the release of the memo, Microsoft CEO Satya Nadella said “there’s more monetization of Xbox games happening on YouTube” than at Xbox, adding that the Xbox team needed to figure out how to “innovate both in hardware, as well as in the games, going forward in an economically viable way.”

“No one can accuse Microsoft of not having invested for the last 25 years,” Nadella added. “Now, we have to turn this into a sustainable business that delivers what is fundamentally one of the best sources of entertainment, still.”

New Xbox chief strategy officer Matthew Ball recently said Game Pass lost “millions of subscribers” after Microsoft increased prices by 50% in October 2025. One of the first strategy changes Sharma brought in was a price cut.

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