Xbox Is No Longer Your Investor: What the Reset Means for Your Studio

Key insights

6 takeaways

01
Eric Kress estimates Sony is outselling Xbox close to 8 to 1 in current unit sales, which he called a leading indicator of what's to come.See it on page 1
02
Xbox's share of third-party software has reportedly fallen from roughly 35 to 40% to around 15%.See it on page 1
03
Microsoft last disclosed 34 million Game Pass subscribers in February 2024, while the Wall Street Journal reported 30 million in 2026 against an internal goal of 77 million.See it on page 1
04
Matthew Kanterman noted that Xbox hardware revenue has declined four fiscal years in a row, by 11%, 13%, 25% and 29%.See it on page 1
05
About 350 people left in July as four studios were spun out, and Ninja Theory had two deals fall through and now faces a proposed closure.See it on page 1
06
Eric Kress pointed out that the latest Gears of War had a Metacritic score around 88 and, by his estimate, has sold fewer than two million units on a budget he puts at $200 to $300 million.See it on page 1

Summary

This GameMakers post by Joseph Kim, dated October 29, 2026, draws on a Pixels & Profits discussion with Matthew Kanterman and Eric Kress about the Xbox reset. The author argues that Microsoft had acted as a patron for game studios through exclusivity payments, Game Pass placement and studio acquisitions, and that all three are now ending. Many figures are the speakers' own estimates, and the post is informational rather than investment advice.

On platform share, Eric Kress estimates Sony is outselling Xbox close to 8 to 1 in current unit sales. The post states that Xbox's share of third-party software has fallen from roughly 35 to 40% to around 15%. Matthew Kanterman pointed out that Xbox hardware revenue has declined four fiscal years in a row, down 11%, 13%, 25% and 29%.

On Game Pass, the post notes that Microsoft last disclosed 34 million subscribers in February 2024, including the Core tier. The Wall Street Journal reported 30 million in 2026 against an internal goal of 77 million. The author's read is that the service may face a slow wind-down or shrink into a back-catalog service.

On acquisitions, about 350 people left in July as four studios were spun out: Ninja Theory, Undead Labs, Compulsion and Double Fine. Compulsion and Double Fine have since left with their IP, and Undead Labs left on similar terms. Ninja Theory had two deals fall through and now faces a proposed closure.