Xbox Reveals First Game Pass Lineup After Massive Layoffs as CEO Admits Strategy Flopped

Microsoft has announced the July Game Pass lineup in its first update since yesterday's sweeping layoffs at Xbox. CEO Asha Sharma cut 1,600 employees from Xbox, with another 1,600 expected to leave over the next year. Four studios were shuttered as part of a restructuring she called the "most significant in Xbox history."

Explaining the cuts, Sharma admitted Microsoft's gaming strategy had failed, with Game Pass a key factor. The Wall Street Journal reported that Microsoft expected Game Pass subscriptions to hit 77 million this year, but current numbers sit around 30 million. During the 2023 FTC vs Microsoft trial, the company had hoped for 100 million subscribers by 2030—a target now looking highly unlikely.

"Our business today is not healthy," Sharma said. "We are operating at margins 3-10x lower than comparable platforms and publishers. We entered Gen 9 with a smaller install base and higher costs. To grow, we bet on Game Pass, multi-platform, and a broader content portfolio. While these created value, they didn't grow as fast as expected. As that happened, our core business weakened, and we added more teams, investment, and time hoping for better outcomes. Now the industry faces its most severe hardware crisis. We must reset Xbox."

Amid questions about Game Pass's future, Microsoft announced the first half of July's lineup, including big titles like Tony Hawk's Pro Skater 1+2 and Palworld 1.0. Available today, July 6, is the 2.5D action Metroidvania Winds of Arcana: Ruination (Cloud, Console, Handheld, PC) on Game Pass Ultimate, Premium, and PC Game Pass. The sole day-one title is Ascend to Zero (Cloud, Xbox Series X|S, Handheld, PC), arriving on Game Pass Ultimate and PC Game Pass on July 13.

Microsoft's Xbox Wire post announcing the lineup made no mention of the cuts or studio closures.