Xbox faces subscriber loss and financial strain as Game Pass quality draws criticism

Moon Studios CEO Thomas Mahler criticized Microsoft’s Xbox Game Pass, comparing it to “communism” and saying the service falters because “there aren’t enough first‑rate games to justify the subscription.” He argued that without compelling content, subscribers see “no reason to stay.”

Microsoft’s gaming division echoed the concerns, with head of Xbox Asha Sharma warning that the current model “cannot continue.” Internal reviews show revenue decline, hardware‑cost spikes and a profit margin of about 3 %. Over the past five years the division has invested more than $20 billion in content, platforms and hardware, yet sales are falling and console‑manufacturing costs are rising. The company is considering a major “Xbox reset,” including possible studio closures and organisational restructuring, to restore profitability.