Xbox CEO Asha Sharma has admitted Game Pass has didn’t grow as Microsoft had expected, with reports indicating it’s tens of tens of millions of subscribers wanting previous targets.
The Wall Street Journal said that Microsoft had expected Game Pass subscriptions to hit around 77 million this yr, but it surely currently has only about 30 million. As revealed through the FTC vs Microsoft trial of 2023, Microsoft had hoped for 100 million subscribers by 2030, which seems most unlikely at this stage.
This week, Microsoft announced 3,200 staff at Xbox are set to lose their jobs this financial yr, with 1,600 going now and the remainder to follow — leaving hundreds of employees with an anxious wait that might drag out for months.
As a part of the cuts, Microsoft has jettisoned 4 studios which were brought in to bolster Game Pass with recent games under the Phil Spencer era, with one other studio in negotiations to be sold or shut down.
In an email to staff, Sharma admitted Microsoft’s gaming strategy had failed, and a key a part of that failure needed to do with Game Pass.
“Our business today shouldn’t be healthy,” Sharma said. “We’re operating at margins which are 3-10x lower than comparable platform and publishing businesses. We entered Gen 9 with a smaller install base and the next cost structure. To grow, we bet on Game Pass, multi-platform, and a broader portfolio of content. While those businesses have created meaningful value, they didn’t grow on the pace we expected. As that happened, our core business weakened, and we added more teams, more investment, and more time, hoping for a greater end result. And now the industry is facing essentially the most severe hardware crisis in its history. We must reset Xbox.”
The entire point of Game Pass is that it provides enormous value to subscribers via an expanding library of games, boosted by big day one launches from Xbox studios. Microsoft invested huge sums in acquiring content for Game Pass, including an eye-watering $69 billion on Activision Blizzard. Spencer hoped to spice up Game Pass subscribers by launching recent Call of Duty games day one. But subscriber numbers have didn’t grow, with console numbers particularly hitting a wall.
Through all of it, Microsoft’s Game Pass strategy has left many scratching their heads. Spencer increased prices by 50% in October last yr in a move current Xbox chief strategy officer Matthew Ball recently revealed had caused Game Pass to “shed tens of millions of subscribers over the span of a couple of months.”
The precise variety of subscribers Microsoft had in early 2026 is unclear, but we do know Game Pass had at the least 34 million members as of February 2024. By July 2025, Xbox Game Pass revenue had reportedly reached nearly $5 billion for the primary time.
One in all the primary decisions Sharma made after replacing Spencer was to chop the worth of Game Pass and pull Call of Duty out as a day one title. Sharma recently told Bloomberg that Xbox had “been capable of reset Game Pass after an eight-month decline.” “It’s now returned to growth and expanding retention,” she added, “and most significantly, we’re beginning to get back to being closer to our players and our community.”
What now for Game Pass? With Double Tremendous, Compulsion, Ninja Theory, and Undead Labs all exiting Microsoft ownership and under no obligation to launch their future games on Game Pass, we may not see State of Decay 3, Senua, and whatever Double Tremendous and Compulsion have up their sleeves launch on the subscription service.
How does Microsoft grow Game Pass with what it’s got? If even recent Call of Duty games fail to grow subscriber numbers at a suitable rate, what can? Could we see Microsoft pull more of its games out of Game Pass as day one titles, hoping for more direct revenue as a substitute? Will Bethesda’s The Elder Scrolls 6 launch day one on Game Pass? Will the following mainline Halo game? Could we see Game Pass develop into more like Sony’s PlayStation Plus, which doesn’t launch first-party games day one?
Is it time to confess that Game Pass has failed?
Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You’ll be able to reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.