According to CEO Asha Sharma, the strategy pursued by her predecessors for Game Pass plunged Xbox into a "free fall"
Article excerpt
No one is unaware that Xbox went through a difficult period in 2026. With nearly 2,000 job cuts following massive layoffs and studio closures, Microsoft's gaming division is undergoing one of the largest restructurings in gaming history. But what led Xbox to this situation? Well, according to its CEO, Asha Sharma, it is largely because of Game Pass. Today, in an internal memo obtained by Windows Central, Sharma reaffirmed that Microsoft's Game Pass strategy had caused Xbox's financial results to plummet. Jez Corden, who initially revealed the existence of this memo, effectively reported that she blamed this decline on "Call of Duty and Xbox Game Pass". And it is easy to understand why. Following Xbox's astronomical 69 billion dollar acquisition of Activision Blizzard and the addition of Call of Duty to Game Pass, subscription prices exploded, which likely drove away many subscribers and, at the same time, caused Call of Duty sales to plummet. After all, why spend 70 bucks on the new Call of Duty when you can simply play it via a monthly subscription? Despite the prevailing pessimism regarding the consequences of Game Pass, Sharma nonetheless hinted that Xbox was still on the path to growth. In her internal memo addressed to employees, she stated: "We are making the right decisions to reinvest in the business. After hitting an all-time low, we have returned to growth, with...
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One of the first decisions made by Sharma after succeeding Phil Spencer as head of Xbox was to lower the price of Game Pass and to no longer make Call of Duty games available day one on the service.
