Xbox is undergoing a massive restructuring involving 3,200 layoffs by July 2027 as CEO Asha Sharma admits Game Pass failed to grow at expected rates. While the service continues to add new titles in July 2026, internal friction has peaked with some studio leaders claiming the model devalues their games.
The current state of Xbox Game Pass is a study in contradictions. On the surface, Microsoft is pushing aggressive discounts and a steady stream of new content. Behind the scenes, the company is grappling with a subscriber shortfall and a deep ideological rift between corporate leadership and the creators of the games themselves.
Asha Sharma and the 30 Million Subscriber Gap
The scale of the struggle became clear in a recent memo from Xbox CEO Asha Sharma. Sharma revealed that Game Pass did not grow at the pace the company expected. This admission coincided with the announcement of the most significant restructure in the organization’s history, which will see 3,200 employees laid off by July 2027.
The numbers highlight a stagnant trajectory. A new report indicates the subscriber count currently sits at 30 million. This is a decline from the 34 million reported in February 2024 and falls drastically short of the 77 million subscribers Xbox had projected to reach by July 2026.
This growth failure has led to a shift in how Microsoft handles its biggest hits.
Studio Leadership and the Devaluation Debate
While executives manage the balance sheet, the people actually making the games are reportedly in open conflict with the subscription model. Bloomberg reporter Jason Schreier recently shared that a significant number of people in Xbox studio leadership absolutely detest
Game Pass.
“There are a lot of people out there in studio leadership within Xbox who absolutely detest Game Pass and think it has destroyed the value of their games, think it has taken away the value from all games in general just as a service, and has been a detriment to the games industry in those people’s views because of how it devalues games.”
Jason Schreier, Bloomberg Reporter
This internal friction is not limited to a few voices. Reporting from Windows Central, citing a former Xbox studio lead, suggests that the practice of adding games to the service on day one sends a message to consumers that the games don’t have inherent market value.
The tension creates a precarious situation for Microsoft. However, maintaining the current model may further alienate the studio heads responsible for the platform’s exclusive content.
July 2026 Content Shifts and Pricing Loopholes
Despite the internal turmoil, the July 2026 calendar remains active. The service is adding a variety of titles, including the day-one launch of the Hades-like Ascend to Zero on July 13 and the arrival of Gears of War: Reloaded on July 9 for Game Pass Premium members.
But the library is also shrinking. On July 15, subscribers will lose access to 10 games, including Dungeons of Hinterberg, EA Sports FC 24, and Shadow of the Tomb Raider.
For consumers, the cost of entry is fluctuating. While Microsoft reduced the monthly cost from $29.99 to $22.99.
- UK Loophole: Users with expired subscriptions can stack EA Play gift cards to get roughly 10 months of Ultimate for £73, bringing the effective cost to £7.28 per month.
- Bulk Purchase: Some US deals offer a 3-month subscription for $68.99 (down from $89.99) via StackSocial.
These pricing anomalies reflect a broader market instability.
The conflict between the “service” and the “product” has reached a breaking point.
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