Katarzyna Petru
The last few days have been exceptionally hot for Microsoft. After a wave of criticism regarding 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' transition to a multiplatform model. He was one of the first to reveal plans for the release of Hi-Fi Rush and other Xbox titles on PlayStation 5. Now he claims 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 expected to be another large wave of layoffs in the Xbox division, comparable to the one at the beginning of 2024.
Costco has withdrawn Xbox Series X|S consoles from sale, and similar decisions are soon to be made by other retailers.
The production plan for new hardware is “at a standstill”, and some teams have been moved to cloud projects.
Microsoft plans to focus on publishing games across all platforms and further develop Game Pass as a cloud service xCloud, with further price increases on the way.
SneakersSO summed it up straightforwardly: the future of Xbox is not hardware, but the publishing and subscription model. The console may become just a name – possibly adopted by external manufacturers, much like Asus ROG Ally X, which already operates within the Xbox ecosystem.
Microsoft responds, but does not dispel doubts
The buzz around the whole issue was so big that Microsoft decided to officially respond. In a conversation with the editorial team of Windows Central, a company spokesperson stated:
“We are actively investing in our future, including in first-party consoles and devices designed, engineered, and created by the Xbox team. For more information, we refer you to the announcement of our agreement with AMD.”
This refers to a statement from June 2025, in which Microsoft announced a multi-year partnership with AMD regarding the co-development of chipsets for “future consoles and cloud devices.”
The problem is that we have heard similar assurances before – and they have not always been backed by reality. The company has managed to drastically change its strategy several times: from a full focus on the cloud, through renewed investments in hardware, to opening up to other platforms. It is no wonder then that the gaming community is reacting with growing scepticism.
Can Xbox really step back from the console market?
It's hard to believe, but observing Microsoft's recent moves – it's not impossible. Internal sources indicate that further investments are shifting towards services and software, while hardware is taking a back seat.
Some analysts suggest that the Xbox brand could be "given" 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 support its own line of consoles.
However, such a scenario would carry risks – the absence of a fully-fledged Xbox console would effectively mean the end of traditional competition with PlayStation, which has driven the industry for two decades.
PS6 Unrivalled? Not So Fast
In theory, if Xbox actually abandons its own hardware, Sony could have a clear path ahead with the PS6. In practice, however, this does not mean an easy victory at all.
Firstly – the PlayStation 6 will not have a straightforward launch. Convincing players to upgrade from the PS5 to a new model may be difficult, especially given the current prices of consoles and games. Secondly – Sony is 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. The PS6 will need to offer something 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 very fact that Microsoft had to issue a statement in the middle of the weekend shows the scale of the problem. The Xbox brand has found itself in a difficult moment – 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 actually decides to abandon its own hardware, it will be a symbolic end of an era in which the console war drove the entire gaming industry.
Source: pushsquare.com
