Xbox could completely give up on hardware and become a pure publisher, according to insider SneakersSO, who has accurately revealed Microsoft’s third-party plans in the past. He also claimed that we could expect another major round of layoffs in early 2026, along with big changes for the next generation.
Rumors of a Hardware Exit
“Without going into too much detail, not long after the last round of layoffs (next one should be coming in Q1 26 btw – and its going to be just as massive as the last one), some rumblings out of Xbox starting coming out that were a little hard to believe,” wrote SneakersSO on the NeoGAF forum.
He explained that the company began to evaluate the results of adding Call of Duty to Game Pass, which reportedly didn’t meet expectations. What really stood out, he said, was how Microsoft’s once solid Xbox hardware plans suddenly became uncertain. This was surprising since the new console was supposedly scheduled for release soon.
“It was one of those situations where, despite folks being told ‘hey, we wanna pull the trigger on this in 2026’, the steps you would need to take in the lead up to delivering a new console gen weren’t being met,” he added. Many projects that once seemed guaranteed were postponed. The fact that Costco stopped selling Xbox consoles — and that other retailers might follow — was, according to him, a major red flag.
A Shift Toward Publishing and Cloud Gaming
SneakersSO concluded: “To sum it up: the future of Xbox is software publishing, with a significantly honed-in focus on profitable IPs (CoD, WoW, Minecraft, Candy Crush, Forza Horizon), Cloud gaming being the home of the ‘Xbox platform’, transititioning GamePass into basically becoming the point of entry subscription for xCloud access (which will continue to drive its price tag higher btw, they aren’t done there just yet either), and releasing their software on any device that has a marketplace and users willing to buy their titles.”
In other words, Microsoft could follow the path of other major publishers, focusing only on its most profitable intellectual properties.
The insider also gave a pessimistic outlook on Xbox hardware: “Maybe some OEM thing will take up the Xbox name, but given what is clearly a collapse in favorable mindshare and faith in said brand, i’m not even sure a 3rd party OEM is gonna want to have an Xbox console by the time MS is done with their reorienting of the division.”
In addition, SneakersSO’s information has been somewhat supported by journalist Tom Warren, known for his reliable Microsoft sources. He described the insider’s sources as strong and credible.
