Hit Points
Independent games industry analysis and commentary by Nathan Brown (ex-Edge).
Documents
Hit Points #373: Serious Hat
This commentary reflects on the current state of the video game industry from the perspective of a consultant balancing professional obligations with critical analysis.
- Nintendo is increasing the price of the Switch 2 by $50/€50, effective in August, citing changes in market conditions and global economic outlook.
- Both Microsoft and Sony reported significant declines in hardware sales, yet are focusing on next-gen offerings; Microsoft with 'Project Helix' and Sony increasing investments for its next-generation platform.
- CCP Games, maker of EVE Online, bought itself back from parent company Pearl Abyss for $120 million (less than half of the 2018 acquisition price of $225 million), rebranding as Fenris Creations and securing investment from Omega Ventures and Google's Deepmind.
Green Shoots
The April 2026 analysis examines the strategic pivot initiated by new Xbox leadership under Asha Sharma, focusing on the company’s attempt to reverse long-standing performance issues.
- Asha Sharma, the new head of Xbox, has initiated a new strategy focused on "daily active players" as the primary metric for success across hardware, content, experience, and services.
- Xbox has reduced the price of its top-tier Game Pass Ultimate subscription by £6/$7 monthly, while new Call of Duty games will no longer launch on the service.
- The decision to remove Call of Duty from day-one Game Pass is estimated to save Microsoft $300 million, indicating the previous model was unsustainable.
I Bring You the Future: #365
The gaming industry is currently experiencing a period of stagnation, characterized by a decline in the traditional excitement surrounding major trade events like GDC and a shift toward incremental hardware updates rather than significant generational leaps.
- Microsoft has officially announced 'Project Helix,' a next-generation Xbox console scheduled for developer availability in early 2027.
- Project Helix is expected to function as a PC-based console running a version of Windows with a dedicated 'Xbox mode' interface, aiming for cross-platform consistency.
- The new hardware will support both Xbox and PC game libraries, with potential features including third-party store integration, modding, and official PC emulation for legacy Xbox titles.
Say Nothing
The February 2026 leadership transition at Xbox serves as the primary focus of this analysis, which examines the appointment of Asha Sharma as CEO following the departures of Phil Spencer and Sarah Bond.
- Asha Sharma has been appointed as the new CEO of Xbox following the departure of Phil Spencer and Sarah Bond, with early media appearances characterized by non-committal messaging and a notable omission of any mention of Game Pass.
- Xbox is currently facing significant business challenges, including stagnant console sales, struggling subscription growth, and a reliance on multi-platform releases that complicates its long-term revenue strategy.
- IGN Entertainment is conducting further layoffs at Gamer Network, including the removal of the entire four-person video team and senior editorial staff at Eurogamer.
Gank Spencer
The retirement of Phil Spencer as CEO of Microsoft Gaming in February 2026 marks a significant transition for the company, accompanied by the unexpected resignation of Xbox president Sarah Bond.
- Phil Spencer retired from his role as CEO of Microsoft Gaming on February 20, 2026, with his final day scheduled for February 23, 2026.
- Sarah Bond, the president of Xbox and previously considered the heir apparent to the CEO position, resigned from the company concurrently with Spencer's departure.
- Asha Sharma, a former VP at Meta and COO of Instacart who most recently served as president of CoreAI at Microsoft, has been named the new CEO of Microsoft Gaming.
Pointless
The closure of Bluepoint Games by Sony in February 2026 marks the end of a studio widely regarded as the industry leader in remakes and remasters.
- Sony announced the closure of Bluepoint Games, effective March 2026, ending the studio's tenure as a PlayStation subsidiary after its 2021 acquisition.
- Bluepoint Games, which employed approximately 70 staff, released no original titles during its four-and-a-half years under Sony ownership, following the cancellation of a live-service project set in the God of War universe in early 2025.
- The studio's final credits include its 2020 PS5 launch remake of Demon's Souls and a support role on Sony Santa Monica’s God of War: Ragnarok.
Back in Your Box
The current gaming industry landscape is characterized by significant economic instability, primarily driven by soaring component costs linked to the rapid expansion of generative AI infrastructure.
- Valve has delayed the release of its Steam Machine, Steam Frame VR headset, and redesigned Steam Controller due to rising component costs driven by AI industry demand.
- AMD CEO Lisa Su confirmed that development for the next-generation Xbox is progressing toward a 2027 launch, despite industry-wide concerns regarding high hardware costs and consumer spending power.
- The Nintendo Switch has become the company's best-selling console of all time, reaching 155.37 million lifetime units sold by the end of 2025 and surpassing the Nintendo DS.
Critical Hits
The gaming industry is currently grappling with a trend of prominent executives adopting increasingly combative stances toward public and critical discourse.
- Larian Studios CEO Swen Vincke retracted a public suggestion that game critics should be scored Metacritic-style after receiving significant industry backlash.
- The 2026 GDC survey indicates that 33% of US game developers experienced layoffs in the last 12 months, with 52% of respondents now viewing generative AI as having a negative impact on the industry.
- Microsoft's gaming division reported a 9% decline in total revenue for the second quarter, driven by a 5% drop in content and services revenue and a 32% decline in hardware sales.
Les incompétents
Ubisoft is currently facing a severe corporate crisis characterized by declining market confidence, operational instability, and a failure to adapt to shifting industry trends.
- Ubisoft's share price dropped 40% following an announcement of a major restructuring that includes the cancellation of six games and the delay of seven others.
- The restructuring involves closing studios in Stockholm and Halifax, implementing a global return-to-office mandate, and laying off staff at Massive, RedLynx, and its Abu Dhabi studio.
- Ubisoft's stock value has declined by over 90% since its 2018 peak, with recent investor dissatisfaction stemming from the sale of franchise rights to Tencent.
Dark Night
The virtual reality gaming sector faces a critical decline as Meta significantly reduces its investment in the Reality Labs division.
- Meta has initiated significant budget cuts and layoffs within its Reality Labs division, effectively signaling a retreat from its long-term metaverse and VR gaming strategy.
- The VR gaming market is struggling to sustain itself, as evidenced by data showing that only one paid game released in 2025 reached the top 20 grossing list on Meta's Quest platform.
- Meta has closed its subsidiary Twisted Pixel Games, leaving only a small cohort of studios—including Beat Games, BigBoxVR, Camouflaj, and Ouro Interactive—under its VR umbrella.
The Song Remains the Same
The gaming industry is currently grappling with concerns regarding market stagnation, specifically following the release of Circana data showing that the five most-played PlayStation games in 2025 were identical to those in 2024.
- The five most-played PlayStation games in 2025 were identical to 2024: Fortnite, Call of Duty, GTAV, Roblox, and Minecraft, reflecting a persistent dominance of established live-service titles.
- Despite the dominance of legacy titles, new games on Steam showed growth in 2025, with 31 of the top 50 grossing games being less than two years old, compared to 24 in 2024.
- Xbox experienced its worst year on record in the UK in 2025, with console sales slumping 39% compared to a 19% decline for PlayStation.
Surrender
The gaming industry is currently witnessing a significant shift in the identity and strategic direction of Microsoft’s Xbox division.
- Microsoft’s Xbox hardware revenue declined by 29% year-over-year, contributing to a 2% overall decrease in gaming revenue.
- Microsoft is expanding its third-party publishing strategy by bringing a remake of Halo: Combat Evolved to PlayStation 5, signaling a shift away from exclusive console hardware.
- Remedy Entertainment reported a 32% revenue drop and a $16.4 million operating loss, largely attributed to the poor performance of the multiplayer shooter FBC Firebreak.