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 overloaded even the subscription cancellation page, the company had to face another blow: rumors of the cancellation of the new generation Xbox.
The source of all the commotion was user SneakersSO from the NeoGAF forum – a person known for previous, accurate leaks about Xbox Game Studios transitioning to a multi-platform 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:
A large wave of layoffs is expected in the Xbox department in the first quarter of 2026, comparable to the one from early 2024.
Costco has pulled Xbox Series X|S consoles from sale, and similar decisions are to be made soon by other retailers.
The production plan for new hardware is "stalled", and some teams have been moved to cloud projects.
Microsoft plans to focus on publishing games on all platforms and further develop Game Pass as a cloud service xCloud, with further price increases on the way.
SneakersSO summed it up directly: the future of Xbox is not hardware, but a publishing and subscription model. The console may become just a name – perhaps taken over by external manufacturers, just like the Asus ROG Ally X, which is already operating within the Xbox ecosystem today.
Microsoft responds, but doesn't clear up doubts
The buzz around the entire situation was so big that Microsoft decided to officially respond. In a conversation with the editorial staff 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 partnership with AMD.”
This refers to the announcement from June 2025, in which Microsoft announced a multi-year partnership with AMD regarding the co-development of chips 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 previously changed its strategy dramatically several times: from a full focus on the cloud, to renewed investments in hardware, to opening up to other platforms. It’s no wonder that the gaming community is responding with growing skepticism.
Can Xbox really step back from the console market?
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 "handed over" to other hardware manufacturers, functioning as a certified platform – similar to how Android operates in the smartphone world today. 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 lack of a full-fledged Xbox console would mean the de facto end of direct competition with PlayStation, which has driven the industry for two decades.
PS6 Unrivaled? Not So Fast
In theory, if Xbox actually gives up on its own hardware, Sony could have a clear path ahead with PS6. In practice, however, this does not mean an easy victory at all.
First of all – PlayStation 6 will not have a straightforward launch. Convincing gamers to upgrade from PS5 to the new model may be challenging, especially given the current prices of consoles and games. Secondly – Sony is not only competing 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.
Rumors 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 moment. But if Microsoft truly decides to abandon its own hardware, it will be a symbolic end of an era, in which the console wars drove the entire game industry.
Source: pushsquare.com
