Last year, I suggested that Xbox could have a big year ahead in 2025, but that it would once again come at a cost, including layoffs, price increases, and other nasty bits of news. And that is more or less what happened this year. We got a lot of games, but that was about the only good news for Xbox in 2025.
That steady drip of big new games that were mostly good, sometimes even great, wasn’t enough to overcome a year in which Xbox expanded desperately in many directions while squeezing wallets tighter and tighter in an effort to be everywhere and increase profits substantially to satisfy Microsoft leadership. All the while, it was dealing with an ongoing and growing consumer boycott due to the tech giant’s continued involvement in Israel’s horrible war crimes against Palestine.
Everything Is An Xbox And Also More Expensive
In 2024, Xbox began marketing the idea that many devices, including your phone and TV, were actually Xboxes. The idea being that via cloud streaming and the proliferation of Xbox Game Pass, you were already surrounded by devices capable of playing Xbox games. In 2025, this initiative continued, but like everything else that happened at Xbox this year, it came with a cost.
This was the year Xbox launched its first handheld console. Well, sort of. The ROG Ally Xbox was essentially a ROG Ally handheld PC that Xbox slapped its name on. It sported a hefty price tag, $600 or $900 depending on your choice of model, and like most Windows-powered handheld gaming devices, it wasn’t very good.
Meanwhile, in May, actual Xbox consoles became more expensive, with the company announcing a price increase for both the Series X and Series S as well as various console accessories. In 2020, the Xbox Series S was just $300 and often easy to find for less via sales. Today, it costs $380. And if you want to buy it used from Xbox, it costs $330, more than a new console at launch. And while Xbox isn’t alone in raising prices on consoles, those aren’t the only things that got more expensive.
Xbox dev kits reportedly got a big price increase, making it harder for smaller teams to justify even making an Xbox game. And Game Pass became even more expensive and complicated after already having been ruined last year. Now Game Pass Ultimate costs $30 a month instead of $20. But hey, at least you get Fortnite Crew and some old Ubisoft games now? Other tiers of Game Pass also got pricier and don’t have access to DLC discounts or the new Call of Duty. This service used to be the best deal in gaming, but now it feels more and more like a utility bill.
Microsoft even tried to launch its first $80 video game, The Outer Worlds 2, in 2025. However, that seemed to have been a bit too much on top of everything else, and after people yelled at them, the price was dropped back down to $70. You can only squeeze people so much before they pop.
Good New Games Arrive While Old Hits Spread To More Places
Speaking of The Outer Worlds 2, Obsidian’s RPG was just one of many big Xbox-published games that launched in 2025.
Thanks to owning so many studios, Xbox was able to launch quite a lot of titles this year, including Keeper, Call of Duty: Black Ops 7, Avowed, Oblivion Remastered, Gears of War: Reloaded, Grounded 2, The Outer Worlds 2, South of Midnight, Doom: The Dark Ages, Tony Hawk’s Pro Skater 3+4, and Ninja Gaiden 4. Some of these were really good. Some were even great. Others were Call of Duty.
Oh, and here’s an interesting side note: Xbox boss Phil Spencer has never tweeted about Halo coming to PS5. Make of that what you want. Perhaps someone isn’t happy about this decision…
Meanwhile, Xbox also brought Gears of War and Forza Horizon 5 to PlayStation 5. And next year, Halo is coming to PS5! While this shift angered and confused some diehard Xbox fans, the move was a big success. Many of the new games mentioned above, most of them in fact, also landed on PS5, and THPS 3+4 even launched on Switch. This strategy of bringing Xbox games to more platforms has led to strange months in which a majority of the most popular games on PS5 were published by Microsoft.
In a vacuum, ignoring everything already mentioned above and everything I’m going to mention later, Xbox had one of its best years in history, offering up a very diverse lineup of games, including big shooters, nostalgic remasters, single-player-focused adventures, multiplayer hits, and plenty of RPGs.
For a long time, people, myself included, criticized Xbox’s meager output. This particular criticism has largely been silenced, with the company putting out more games than most people can play in a year. Unfortunately, how and why Xbox has reached this point sours everything.
Profits, Layoffs, And A Boycott
So why is Xbox working so hard to squeeze its customers for every last penny, regardless of how greedy, desperate, or aimless it looks in the process? Simple: Microsoft demands big profits.
That’s the major reason Xbox is bringing its games to more places. (Another being low console sales.) And it’s the same reason the company is now charging a lot more for Game Pass, has increased prices on consoles, and even tried to sell an $80 game. It’s also why Xbox keeps cancelling games, laying hundreds of people off, and shutting down studios. It’s probably why the company shoved a bunch of ads onto ancient Xbox 360 machines with an update earlier this year, and it’s surely the reason its future plans for game streaming include advertisements.
As reported by Bloomberg, since around 2023, Microsoft CFO Amy Hood has mandated a 30 percent profit margin for Xbox. This is much higher than most other video game companies and publishers, which on average aim for 17 to 22 percent. It is also much higher than where Xbox’s profit margin has historically landed, somewhere in the 10- to 20-percent range depending on the year.
©Xbox
With that information in hand, it makes horrific sense that Xbox is jacking up prices on everything and trying to sell its games and services across as many devices as possible. Microsoft demands more money, and Xbox leadership is desperately doing whatever it can to feed the beast.
And in 2025, it became very clear how hard Xbox is being pushed to make more money than ever before to help support Microsoft’s costly AI plans and to make good on that massive Activision deal. This has led to every part of Xbox being squeezed, cut, nipped, or trashed. Game Pass is a mess nowadays. The simple promise of getting every new Xbox game day one is long gone. Layoffs keep happening. Games keep getting delayed and canceled.
And all of this is happening under the reality that a large and growing number of people are boycotting the company over Microsoft’s connections to Israel as the country continues to attack and destroy Gaza and its people in a conflict that looks to have no end, as the death toll, which includes many children, rises. Xbox doesn’t want to talk about this, clearly, but as we enter 2026, it’s going to be harder and harder for devs and execs to avoid this topic.
The Future Of Xbox Is Bleak
What even is an Xbox anymore? What is this brand? At one time, it was a console, like the PlayStation, that featured some popular exclusive games. Now, Xbox is everywhere, yet feels less relevant than ever before. I know fewer people who own and use an Xbox in 2025 than I did in the worst years of the Xbox One era. Yet many are playing Xbox games, just on their PC, Switch, PS5, or phone via streaming.
Xbox has promised that it is working on a new console, but it sounds like it might be a pricey high-end PC and not a traditional gaming device like those we’ve come to expect from a console maker. It’s the kind of move that reinforces what many have already declared: Xbox is dead.
Whatever this is and becomes in 2026, it won’t be the Xbox from 20 years ago. Instead, it seems the future of Xbox is for the brand and company to be consumed by Microsoft and treated like Office. And that’s not my pitch. Those are the CEO of Microsoft’s words: “We want to be a fantastic publisher, similar to the approach of what we did with Office,” said Satya Nadella in October.
So the future of Xbox and games like Halo is likely one where they’re available on many platforms, locked behind more paywalls, and you pay for access begrudgingly each month while the product gets worse and worse, and more expensive, too. It’s a bleak future, I agree, but for investors, it’s likely what they’ve always wanted.
