Update: Microsoft has issued the following statement to Windows Central in regards to this rumor:
“We are actively investing in our future first-party consoles and devices designed, engineered and built by Xbox. For more details, the community can revisit our agreement announcement with AMD.”
In the last few years it is clear that Microsoft is doing some new things that haven’t been done in the gaming space, like bringing their first party games to their competition. Even though Sarah Bond announced that Xbox would have a new console set to be announced in 2026 and they just announced changes to their Game Pass service, a new rumor suggests that they will be instead going full third party. This rumor comes from insider SneakersSO:
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.
The ramifications of the CoD GP gambit not working out were just starting to get properly measured, but the thing that really stuck out to me was that suddenly, really concrete plans for actual MS Xbox HW went from being definitive, to up in the air, which was really startling given that this thing was meant to be out relatively 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. Lots of things that were ‘sure things’ started getting pushed. The Costco retailer pulling Xbox, and apparently they are one of many that we’ll learn about soon, told me all I needed to know.
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.
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.
If this is true then gaming’s next generation will look a lot different, with Sony and Nintendo being the only two to choose from. Even though they are both consoles, they aren’t exactly in direct competition with each other. Playstation usually goes for power while Nintendo goes for innovation and fun, with the Switch 2 being a console and handheld. It’s possible that Sony will pivot and start to be in more direct competition with Nintendo, but up until now they have mainly focused on Xbox. Even their Playstation Plus service had an overhaul to more closely resemble Game Pass in recent years. This lack of competition could also cause them to not be as consumer friendly. New games are already up to $70 with some rumors saying that the next Grand Theft Auto could be closer to $100.
The future of gaming could be a lot different if one of the three big console makers leave the market. Do you think Microsoft would be willing to leave the console market after already announcing next generation hardware? Let us know.
