Has Microsoft been on the verge of abandoning the Xbox brand? That’s what their own leaks say

It seems to be a diversion strategy...

Has Microsoft been on the verge of abandoning the Xbox brand? That’s what their own leaks say
Chema Carvajal Sarabia

Chema Carvajal Sarabia

Microsoft may have considered exiting the video game market if Game Pass wasn’t successful. This sounds drastic, but it’s what several media outlets have discovered thanks to the massive leaks this week.

Xbox Game Pass DOWNLOAD

Game Pass and other related cloud gaming services have become the core of Microsoft’s gaming strategy, but the recent leak of company documents suggests that Microsoft is betting the entire future of Xbox on a single card.

It’s not clear to what extent Microsoft’s situation is truly critical or if their statements are another attempt to portray themselves as the underdog in the midst of their legal battle with the FTC. Of course, here, we can’t believe everything we read.

Is it an intentional leak?

A new revelation from the significant leak of legal documents in the FTC case against Microsoft indicates that the company has at least considered exiting the video game market if its Game Pass subscriber base doesn’t grow sufficiently in the coming years.

Throughout the regulatory hearings, Microsoft has often described its console as a losing competitor.

According to the document, FTC attorney James Weingarten asked Xbox head Phil Spencer about an internal Microsoft chart that projected Game Pass could reach over 100 million subscribers by 2030.

Spencer characterized the projection chart as pessimistic, suggesting that the company might reorient its strategy if it doesn’t reach that milestone by the fiscal year 2026 or 2027. A Microsoft LinkedIn profile recently indicated that Game Pass currently has 30 million users, but this week, Microsoft revised the count and reiterated the figure of 25 million from last year.

Additionally, the chart shows that the majority of Game Pass customers use the service on Xbox, but Spencer said that the current direction of the company relies on the proportion of PC and cloud users growing much faster than previously described.

Presenting the company as smaller to convince the jury?

The strategy would align with Microsoft’s plans to promote gaming across various devices.

“I don’t think that’s the future business for Xbox. This is a presentation from our device organization to the gaming leadership team, so this is the hardware team’s opinion about what the future business would be,” Spencer said.

“I can say pretty categorically that if all we do is work outside of the console, we would get out of the gaming business. If that was the outcome, we would,” concludes the Xbox head.

There is a possibility that Spencer may be exaggerating, as multiple statements during the legal process appear to be designed to make the company’s position in the gaming market seem weak.

Microsoft is trying to convince regulators that its $69 billion bid to acquire Activision Blizzard will not give it an unfair advantage in the console and cloud gaming businesses.

The company previously admitted that it has “lost” the console war because Xbox sales place it third behind PlayStation and Nintendo Switch.

Furthermore, Microsoft has committed to keeping Call of Duty, a central aspect behind regulatory scrutiny, on platforms outside of Microsoft because making it exclusive to Xbox would lead to the company losing money. The UK’s CMA is likely the last hurdle the acquisition faces.

Other leaked information includes Microsoft’s plans for future consoles, confirming its dedication to staying in the race. However, Spencer stated that the company’s plans have evolved since the documents were created in 2022 and before.

Chema Carvajal Sarabia

Chema Carvajal Sarabia

Journalist specialized in technology, entertainment and video games. Writing about what I'm passionate about (gadgets, games and movies) allows me to stay sane and wake up with a smile on my face when the alarm clock goes off. PS: this is not true 100% of the time.

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