Right, so this Xbox situation, it’s a mess. Asha Sharma, the new CEO, she’s making big moves, big changes, right now. There are layoffs, 3,200 employees, and they’re divesting five Xbox Game Studios. This is part of what they’re calling an “Xbox Reset.“The whole multiplatform strategy, it didn’t work like they wanted.

Sharma said in an email that these businesses, the multi-platform and broader content portfolio, they created value but did not grow at the pace expected. The core business weakened, and they added more teams, more investment, more time, hoping for a better outcome. Now the industry faces the most severe hardware crisis in its history. Xbox Game Pass, that’s a big part of this, a huge part. It’s reportedly at 30 million subscribers right now.

That’s down from 34 million in September 2024. Microsoft had projected 77 million subscribers by 2026, a massive miss. What happened? There was a 50% price increase in October 2025, Game Pass Ultimate went from $19.99 to $29.99 per month. That led to millions of cancellations, like 4 million players cancelled.

Sharma cut the price later, and they say growth has started again after eight months of decline. Phil Spencer, he was saying for a while that exclusives would be a smaller part of the industry. He said there was no reason to put a ring fence around any game. Xbox ported Hi-Fi Rush, Grounded, Pentiment, and Sea of Thieves to PlayStation and Nintendo in early 2024. Doom: The Dark Ages and The Outer Worlds 2 were confirmed for day-one PS5 releases. Indiana Jones and the Great Circle was also coming to PS5 in Spring 2025. But now, the pendulum is swinging back. Sharma is betting on more exclusivity. Gears of War: E-Day and Clockwork Revolution are confirmed as fully exclusive to Xbox consoles.

This is a direct shift, a reversal of the previous thinking. They want to convert more gamers into core Xbox users with these exclusives. Hardware sales, they are not good. Xbox hardware revenue decreased 25% in fiscal year 2025. And then another 32% decrease in Q2 fiscal year 2026, ending December 31, 2025.

That’s lower volume of consoles sold. It’s a tough market.Sony, they are doing the opposite, sort of. They are reportedly pulling back from PC for their narrative single-player games. Hermen Hulst, Head of PlayStation Studios, told staff that narrative single-player games will now be PlayStation exclusive.

Games like Saros, Ghost of Yotei, and Marvel’s Wolverine are staying on PlayStation. This is to differentiate the console, to drive sales. But live service games, like Helldivers 2, they still launch day-one on PC. So it’s a mixed strategy, but for their big single-player titles, it’s back to exclusivity. I mean, how many times do we see these companies pivot, right?

It’s like they throw everything at the wall and see what sticks. My own trade, I bought some Microsoft (MSFT) stock back on January 15, 2024, at around $382.00 a share (the average closing price for January 2024 was $382.03). I’ll sell when they figure out a consistent strategy for Game Pass and hardware, or if it hits $500, whichever comes first. The new Sony IER-M500 in-ear monitors, they were announced yesterday, July 8, 2026. Pre-orders opened the same day.

They’re priced at $119.99 USD. It’s a professional-grade monitor, high noise isolation, secure fit. Sony is strengthening its professional audio line. This whole situation, it just shows the volatility. Xbox tried to be everywhere, now they’re trying to pull back some of their biggest games to make the console more appealing.

Sony tried to expand to PC, now they’re reinforcing the console value. It’s a constant battle for market share and user engagement. And the hardware market is just brutal right now, really brutal. What’s the right answer for these companies?

I don’t know, but it’s not looking easy for anyone.