Microsoft Doesn't Care About Xbox
Gamers Nexus · 2026-09-17 · 36 min
https://www.youtube.com/watch?v=NX45ctOJnpgVideo summary
Microsoft cut 3,200 Xbox jobs, raised console prices, and spent $27 billion on AI chips amid falling Xbox sales.
Xbox revenue is sliding: Microsoft reported a 7% year-over-year decline, with console revenue down 29%, while its $41 billion quarterly infrastructure spend prioritized AI data centers. The video traces Xbox’s arc from the original console’s 24 million sales and the Xbox 360’s 84 million to the Xbox One’s costly Kinect bundle, unpopular online requirements, and years of shifting strategy. Microsoft’s $69 billion Activision Blizzard deal and other studio purchases were followed by closures, canceled games, and thousands of layoffs; new leader Asha Sharma faces further cuts and price hikes. Game Pass prices rose before being partly rolled back, while cloud playtime was capped. The central contradiction: Microsoft blames a memory and storage crunch for Xbox price increases, yet spent about $27 billion on CPUs and GPUs in one quarter and is stockpiling or renting Nvidia hardware for AI ambitions.
Chapters
- 0:00Microsoft’s Contradictions: Xbox Revenue Falls 7% as $41 Billion Goes to AI Data Centers
- 2:21New Xbox Leadership: Asha Sharma Targets Fiscal 2030 Margins After 3,200 Layoffs
- 4:20Xbox Game Pass Changes: Essential Gets 10 Minutes a Day and Ultimate 15 Hours a Month
- 6:49History of Xbox: From 24 Million Original Consoles to the Xbox One Downturn
- 9:46Kinect: The Beginning of the Freefall—Xbox One’s $500 Launch and Privacy Backlash
- 12:07Spending Spree: $69 Billion Activision Deal Followed by Studio Closures and Strategy Reversals
- 17:56Mass Layoffs: At Least 5,750 Xbox Cuts and 3,200 More Planned
- 20:47Price Hikes: Xbox Series X Reaches $750 and Game Pass Ultimate Peaks at $30
- 27:06Xbox Sales Plummet and PCs for AI Agents: Hardware Revenue Falls 29%
- 30:21Microsoft’s GPU Piles: $27 Billion in Quarterly CPUs and GPUs
- 33:23Conclusion: Microsoft’s AI GPU Demand Fuels the Memory Crisis Behind Xbox Price Hikes
What the full analysis includes
11 chapters · 56 key points · 11 section summaries · mind map
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