Microsoft’s Xbox has had a tumultuous year.

A slew of layoffs, price hikes and studio closures have led many to declare — not for the first time — that the Xbox is dead.

Laura Fryer, former executive producer at Microsoft Game Studios, said in June that the company seems to have “no desire or literally can’t ship hardware anymore.”

Former Microsoft executive and ex-Blizzard Entertainment president Mike Ybarra slammed Xbox’s “confusing” strategy in a now-deleted X post in October, saying the company is potentially heading for a “death by a thousand needles.”

The company’s overall gaming revenue decreased 2% year-over-year, with a 29% dip in Xbox hardware sales, according to Microsoft’s first-quarter earnings for fiscal 2026.

The broader console industry has been in a major slump, with hardware spending down 27% year-over-year in November, which is typically a busy shopping month, according to a recent report from research firm Circana.

It was the worst November in two decades, IGN reported, citing Circana data.

Combined Switch and Switch 2 unit sales were down more than 10% during the month and PS5 sales were down more than 40%, IGN said. But the Xbox Series hardware took the biggest beating, with a dramatic 70% drop in sales.

In console sales, Xbox can barely see the leaders this year.

Nintendo‘s Switch 2 has sold 10.36 million units since its debut in June, the company said in its latest earnings report. Sony‘s PlayStation 5 had 9.2 million units sold in 2025, according to its most recent financial results.

Microsoft’s Xbox Series S and Series X, at 1.7 million units, couldn’t outsell the original Nintendo Switch, which launched in 2017 and has sold 3.4 million units so far this year, data from game sales tracking site VGChartz estimated.

Microsoft declined to comment on Xbox sales or numbers.

The company stopped reporting console unit shipments in 2015 as the gap between Xbox and PlayStation widened.

The Series S, Series X and PS5 all originally released in 2020, with some updates being released since then.

In November, Valve made a splash with its next-generation Steam Machine, which is set to launch next year.

The reveal of its console-PC hybrid generated buzz across the gaming landscape, with The Verge declaring that “Valve just built the Xbox that Microsoft is dreaming of.”

The mini cube will be able to run Windows PC games through Valve’s own Linux-based SteamOS as a television console or as a gaming computer. Gamers will have access to Steam’s extensive library of thousands of games.

But Microsoft doesn’t seem too worried about falling behind.

“We’re not in the business of out-consoling Sony or out-consoling Nintendo. There isn’t really a great solution or win for us,” Microsoft Gaming CEO Phil Spencer said in a 2023 podcast.

In congratulating Valve on the release, the Xbox boss gave a nod to the movement to expand gaming access “across PC, console and handheld devices.”

As Sony and Nintendo have firmly established themselves as hardware companies, Microsoft is pushing toward Bill Gates’ original vision of an all-encompassing entertainment hub in the living room.

“Ultimately, the addressable market is anybody who wants to play games, and Microsoft wants to serve that market,” Wedbush analyst Michael Pachter told CNBC.

Microsoft CEO Satya Nadella said in a recent interview with the TBPN podcast that the company’s gaming business model will look to be “everywhere in every platform,” from consoles to TV to mobile.

His comments also hinted that the next Xbox may function more like a PC.

“It’s kind of funny people think about the console and PC as two different things,” Nadella said. “We built a console because we wanted to build a better PC, which could then perform for gaming. So I kind of want to revisit some of that conventional wisdom.”

Xbox President Sarah Bond echoed the idea, saying in a recent interview with Mashable that the company’s next-generation console will have “some of the thinking” seen in the Xbox’s new handhelds, which were built by hardware manufacturer Asus in partnership with Microsoft.

Launched in October, those devices support cross-platform gaming and can run PC games bought from Epic Games, CD Projekt and Valve stores.

Xbox has already incorporated that approach into the latest Backbone Pro, which rolled out in November. 

Designed in partnership with Backbone Labs, the portable gaming controller offers access to cloud gaming on mobile, PC, smart TV and other streaming devices.

So what will Microsoft’s new-gen console look like?

Little is known about where the company is at in its development. 

A source familiar with Xbox strategy told CNBC that the company is looking at creating an open system that enables players to jump between console, PC and cloud gaming — and any form of entertainment beyond gaming.

In a 2019 interview with The Verge, Spencer said that he was not concerned with focusing on console sales as much as making games accessible.

“I do think as we look at the next decade of gaming, as we think about reaching the over 2 billion people on the planet who play games, many of those people won’t be buying consoles and gaming PCs,” Spencer said.

Xbox Game Pass subscription service, which gives subscribers access to games from a variety of publishers, is a clear example of this strategy.

Microsoft has been steadily expanding its title offerings on the service.

The platform’s most basic tier, Game Pass Essential (previously Game Pass Core), which costs $9.99 and launched in 2023 with 36 games, now offers over 50 titles.

Ultimate tier members have access to over 500 titles.

The growth in cloud gaming has been blistering.

Xbox reported a record 34 million Game Pass subscribers in 2024 and a total Game Pass revenue of almost $5 billion over the last fiscal year. 

Xbox said in a November blog post that the number of cloud gaming hours from Game Pass subscribers was up 45% compared to the same time last year. The Microsoft subsidiary also said console players are “spending 45% more time cloud streaming on console and 24% more on other devices.”

In announcing the benchmark, the platform added that Xbox Cloud Gaming is now in 30 countries with the expansion into India, which it called “the fastest-growing gaming market in the world,” home to more than 500 million gamers this year.

Although Microsoft faced heavy criticism from subscribers after increasing the cost of its Ultimate tier by 50% from $19.99 to $29.99 in October, the company is reportedly testing an ad-supported version of Xbox Cloud Gaming.

Omdia senior principal analyst George Jijiashvili told CNBC that a free Game Pass tier would likely act as a user-acquisition tool, especially for gamers who have not invested in consoles yet.

However, due to the high costs associated with cloud gaming, an ad-supported tier would likely not be able to actually drive a meaningful amount of revenue, he said.

Cloud gaming is inherently difficult to scale since it needs to balance computing power and operating costs with user affordability.

“With console-grade cloud gaming, you need to essentially run every single instance of the game in a server,” Jijiashvili said. “You need a dedicated hardware for every single person that’s streaming the game, meaning it just doesn’t scale.”

Despite gaming’s scaling limitations, Microsoft seems committed to doing what it has done with the rest of its products — moving it to the cloud. 

“They’ve evolved into a primarily cloud services company,” Pachter said. “So everything they’ve done since they started acquiring studios at Xbox has been toward the connected experience in the home to view entertainment.”

Bond recently said in an interview with Mashable that the idea of exclusive games is “antiquated” as the company has leaned into cross-platform gaming.

Microsoft announced in October that the upcoming “Halo” game will be available on Sony’s PlayStation 5, marking the first time the major franchise has become accessible on a competing console.

In 2024, Xbox opened four formerly exclusive games to other consoles.

Spencer said at the time that the move did not indicate a change in Xbox’s exclusive strategy, but the company has since continued to bring several former exclusives to rival platforms.

In a January interview, Spencer said that the company won’t “put walls up” where users can engage with Xbox games.

“What we’ve learned is put the games first, make sure the games can be as great as they can,” he said. “We love the experience on our own hardware, on our own platform, but our games will show up in more and more places.”

Microsoft laid off 1,900 workers, around 9% of its gaming division, in January and slashed another 650 jobs from Xbox in September.

In May, the company also shut down several studios under game publisher Bethesda, including “Redfall” maker Arkane Austin and “Mighty Doom” developer Alpha Dog Games.

The gaming unit was hit again when company-wide layoffs in July led to Microsoft shelving “Perfect Dark” and “Everwild,” games that have reportedly been in development for at least seven years, as well as multiple unannounced projects.

Some have attributed the cost-cutting measures to mounting pressure to hit lofty profit goals.

The company reportedly asked its gaming division in 2023 to target profit margins of 30%, according to Bloomberg, which cited people familiar with the matter.

The goal was a significant jump from the 12% profit margin Xbox reached in 2022, as revealed in court documents, and well above the average video-game industry standard of 17% to 22%, analysts told Bloomberg.

Microsoft told CNBC that while the company does set ambitious goals, the reported 30% profit margin target was incorrect.

Microsoft has raised prices on its aging lineup of flagship consoles twice over the past year. Nintendo and Sony also announced price hikes for their respective consoles in August. 

The PS5 currently starts at $549.99, and the original Nintendo Switch and Nintendo Switch 2 cost $399.99 and $499.99, respectively.

Xbox’s new ROG Xbox Ally and ROG Xbox Ally X were priced at $599.99 and a staggering $999.99, respectively.

With a growing number of consoles and handhelds in the market, competition is fierce for a dedicated group of customers that will always be interested in owning hardware.

But Xbox is betting that cloud and cross-platform gaming are the future.

For a decade, claims have been made about the death of the Xbox, and what comes next could fully spell the end, or bring a metamorphosis.

For years, Braden Wallake has posted everything from business lessons to animal pictures on his LinkedIn page. A fateful midweek post on a late-summer day stopped the marketing executive in his tracks.

Wallake shared a teary-eyed selfie with a message about his feelings after laying off staff. Just like that, he was the “Crying CEO.”

“I woke up the next day, texted my marketing person and said, ‘I think I went viral last night,'” said Wallake, whose post has raked in more than 57,000 reactions and 10,000 comments.

Users blasted the HyperSocial CEO as being “manipulative” and displaying “self indulgence.” The photo “would make a great dart board,” another wrote.

Corporate executives and founders like Wallake were sold on the idea that a vibrant social media presence can boost their personal and firm-wide brand awareness. But the reality is less picture-perfect than it’s made out to be.

In many cases, these leaders come off not as relatable but as cringey. And they’re learning the hard way that their digital footprints can even have material business implications.

“There can be real benefits from CEOs being online, but there can also be great risks,” said Ann Mooney Murphy, a Stevens Institute of Technology professor who has studied how company leaders gain social media celebrity status. “One needs to tread carefully.”

The pitfalls of social media usage for business leaders are becoming increasingly clear as more executives take to the platforms. Nearly three-fourths of Fortune 500 chief executives had at least one social media account last year, up from roughly half in 2019, data from Influential Executive showed.

More than seven out of 10 Fortune 100 CEOs with social platforms posted at least once a month in 2024, a 32% increase from the year prior, according to an analysis from communications firm H/Advisors Abernathy released this week. CEOs have flocked in particular to the work-focused social site LinkedIn, where they post three times a month on average.

An active social media presence can help build brand recognition and drive attention from mainstream news outlets, Murphy said. It can also allow executives to develop para-social relationships directly with consumers — something that was once reserved for more-traditional celebrities like actors or athletes, she said.

While company news was king in these posts, H/Advisors Abernathy found executives devoting more social real estate to sharing personal happenings. This softer style of content — examples of which include Meta CEO Mark Zuckerberg sharing pictures from Taylor Swift’s “Eras” tour and Goldman Sachs‘ David Solomon posting details for his DJ sets — can help keep followers engaged, Murphy said.

A subsector has sprouted up around executives’ social media habits, with several businesses offering training programs or consulting services focused on best practices. PayPal made waves in marketing circles earlier this year when it posted a “Head of CEO Content” role, which paid upwards of $300,000 in part to lead social media communications strategy.

Around the same time as Yanowitz’s tweet, a social media video featuring Snowflake revenue chief Mike Gannon offered a case study on how these incidents can evolve into real-world crises.

In an Instagram clip viewed millions of times, Gannon told a street interviewer that the data storage firm was slated to rake in $10 billion “in a couple of years.” Shortly after, Snowflake said in a regulatory filing that statements made in the interview were not authorized and that investors “should not rely upon” them. The company declined to make Gannon available for an interview.

Tesla CEO Elon Musk has shared visions for his business ventures on social media in between musings about politics and cultural issues. Two years ago, Musk found himself in court defending comments related to business plans made on X, his social media platform formerly known as Twitter.

In several instances, readers have responded directly to executives whose content they find problematic or cringe-inducing. Some, like Ryan Benson, have also mocked the broader trend of business leaders’ attempting to connect directly via social media.

“It’s just disingenuous,” said Benson, 28. “They’re not trying to speak with people the way that maybe an influencer has success in. They’re trying to talk at people to make them think something about their position.”

Executives’ missteps on social media can catalyze discontent from investors, consumers or employees, according to Murphy of the Stevens Institute of Technology. In some situations, she said social media statements could lead to increased regulatory or legal risk for the companies they represent.

When Yehong Zhu, co-founder of media technology startup Zette AI, jumped on a day-in-my-life trend, responders roasted her over perceived laziness. People said she should be “embarrassed” and was “fundamentally useless to society.” One commenter said they were “printing this out and taping it to the wall to remind me every time I catch myself believing in meritocracy.”

Zhu received handwritten hate mail tied to the post sent to her office. But she also noticed a flood of press coverage that included the company’s name and signups to a product waitlist, underscoring the power of publicity — even if it’s negative.

“After there was this huge influx of attention, I realized, you know what, maybe all attention is good attention,” Zhu said. “As long as your name is in their mouth, you’re doing something right.”

Zhu later understood that her post was taken as “rage bait,” a genre of content so infamous that Oxford named it the 2025 word of the year. She’s currently undergoing a social media rebrand and is considering leaning toward controversial posts — with the hope of winning more attention online.

“I was not trying to rage bait,” she said of the original post. “The day that I actually try to rage bait, everybody will be actually enraged.”

Layoffs have been a defining feature of the job market in 2025, with several major companies announcing thousands of job cuts driven by artificial intelligence.

In fact, AI was responsible for almost 55,000 layoffs in the U.S. this year, according to consulting firm Challenger, Gray & Christmas.

There were in total 1.17 million job cuts through 2025, the highest level since the Covid-19 pandemic in 2020 when there were 2.2 million layoffs announced by the end of the year.

In October, U.S. employers announced 153,000 job cuts, and there were over 71,000 job cuts in November, with AI being cited for over 6,000 for the month, per Challenger.

At a time when inflation bites, tariffs are adding to expenses, and firms are looking to carry out cost-cutting measures, AI has presented an attractive, short-term solution to the problem.

The Massachusetts Institute of Technology released a study in November showing that AI can already do the job of 11.7% of the U.S. labor market and save as much as $1.2 trillion in wages across finance, healthcare, and other professional services.

Not everyone is convinced that AI is the real reason behind the dramatic job cuts, as Fabian Stephany, assistant professor of AI and work at the Oxford Internet Institute, previously told CNBC, that it might be an excuse.

Stephany said many companies that performed well during the pandemic “significantly overhired” and the recent layoffs might just be a “market clearance.”

“It’s to some extent firing people that for whom there had not been a sustainable long term perspective and instead of saying ‘we miscalculated this two, three years ago, they can now come to the scapegoating, and that is saying ‘it’s because of AI though,'” he added.

Here are the top firms that cited AI as part of their layoff and restructuring strategy in 2025.

In October, Amazon announced the largest ever round of layoffs in its history, slashing 14,000 corporate roles, as it looks to invest in its “biggest bets” which includes AI.

“This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before… we’re convinced that we need to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business,” Beth Galetti, senior vice president of people experience and technology at Amazon, wrote in a blog post.

Amazon CEO Andy Jassy warned of the cuts earlier this year, telling employees that AI will shrink the company’s workforce and that the tech giant will need “fewer people doing some of the jobs that are being done today, and more people doing other types of jobs.”

Microsoft has cut a total of around 15,000 jobs through 2025, and its most recent announcement in July saw 9,000 roles on the chopping block.

CEO Satya Nadella wrote in a memo to employees that the company needed to “reimagine” its “mission for a new era,” and went on to tout the significance of AI to the company.

“What does empowerment look like in the era of AI? It’s not just about building tools for specific roles or tasks. It’s about building tools that empower everyone to create their own tools. That’s the shift we are driving — from a software factory to an intelligence engine empowering every person and organization to build whatever they need to achieve,” Nadella said.

Global tech giant IBM’s CEO Arvind Krishna told the Wall Street Journal in May that AI chatbots had taken over the jobs of a few hundred human resources workers.

However, unlike other companies that had cited AI in job cuts, Krishna admitted that the firm had increased hiring in other areas that required more critical thinking, such as software engineering, sales, and marketing.

In November, the company announced a 1% global cut, which could impact nearly 3,000 employees.

Cybersecurity software maker CrowdStrike said in May that it’s laying off 5% of its workforce or 500 employees, and directly attributed the cuts to AI.

“AI has always been foundational to how we operate,” co-founder and CEO George Kurtz wrote in a memo included in a securities filing. “AI flattens our hiring curve, and helps us innovate from idea to product faster. It streamlines go-to-market, improves customer outcomes, and drives efficiencies across both the front and back office. AI is a force multiplier throughout the business.”

In February, HR platform Workday was one of the first companies this year to say its cutting 8.5% of its workforce, amounting to around 1,750 jobs, as the company invests more in AI.

Workday CEO Carl Eschenbach said the layoffs were needed to prioritize AI investment and to free up resources.