Katarzyna Petru
The last few days have been exceptionally hot for Microsoft. After a wave of criticism concerning the 50% price increase of Game Pass, which even overloaded the subscription cancellation page, the company had to face another blow: rumours about the cancellation of the new generation Xbox.
The source of all the commotion was a user SneakersSO from the NeoGAF forum – a person known for previous, accurate leaks regarding Xbox Game Studios moving to a multi-platform model. They were one of the first to reveal plans for the release of Hi-Fi Rush and other Xbox titles on PlayStation 5. Now, they claim that the next Xbox console, originally planned for 2026, may not be released at all.
According to his information:
In the first quarter of 2026, there is set to be another major wave of layoffs in the Xbox department, comparable to that of early 2024.
Costco has pulled Xbox Series X|S consoles from sale, and similar decisions are expected to be made by other retailers soon.
The production plan for new hardware is “stalled”, and some teams have been shifted to cloud projects.
Microsoft plans to focus on releasing games on all platforms and further develop Game Pass as a cloud service with xCloud, with more price increases on the way.
SneakersSO summarised it plainly: the future of Xbox is not hardware, but a publishing and subscription model. The console may become just a name – possibly taken over by external manufacturers, similar to the Asus ROG Ally X, which is already operating within the Xbox ecosystem.
Microsoft responds, but doesn't clear up doubts
The buzz around the whole issue was so significant that Microsoft decided to officially respond. In a conversation with the Windows Central editorial team, a company spokesperson said:
“We are actively investing in our future, including first-party consoles and devices designed, engineered, and created by the Xbox team. For more information, we refer you to our announcement of our agreement with AMD.”
This references a statement from June 2025, in which Microsoft announced a multi-year partnership with AMD to co-create chips for “future consoles and cloud devices.”
The problem is that we have heard similar assurances before – and they haven't always been backed by reality. The company has repeatedly changed its strategy dramatically: from a complete focus on the cloud, to renewed investments in hardware, and even opening up to other platforms. It’s no wonder that the gaming community is reacting with increasing skepticism.
Can Xbox really pull out of the console market?
It's hard to believe, but watching Microsoft's recent moves – it's not impossible. Internal sources indicate that subsequent investments are shifting towards services and software, while hardware is taking a back seat.
Some analysts suggest that the Xbox brand may be 'given away' to other hardware manufacturers, to serve as a certified platform – much like Android operates today in the smartphone world. Theoretically, such a solution would allow Microsoft to maintain a presence in the gaming market without the need to maintain its own line of consoles.
The thing is, such a scenario would carry risks – the absence of a fully-fledged Xbox console would essentially mean the end of classic rivalry with PlayStation, which has driven the industry for two decades.
PS6 without competition? Not so fast
In theory, if Xbox actually gives up its own hardware, Sony could have a clear path with PS6. In practice, however, that doesn’t mean an easy victory.
Firstly – PlayStation 6 will not have a simple launch. Convincing players to trade in their PS5 for a new model may be difficult, especially given the current prices of consoles and games. Secondly – Sony is already competing not only with Microsoft but also with Nintendo Switch 2, PC gaming, and entertainment platforms like Netflix, TikTok, and YouTube.
This means that even without Xbox, Sony cannot afford to be average. PS6 will need to offer more than just power – a real technological leap and new ideas for gameplay will be necessary.
Rumours about the cancellation of the new Xbox may be exaggerated, but the fact that Microsoft had to issue a statement in the middle of the weekend shows the scale of the problem. The Xbox brand is in a tough spot – caught between the cloud and the console, between business ambitions and its image among gamers.
Will the PS6 really be left without a competitor? Perhaps for a while. But if Microsoft does decide to abandon its own hardware, it will symbolize the end of an era in which the console war drove the entire gaming industry.
Source: pushsquare.com
