Hacker News Reader

Comment by ErneX | Hacker News Reader

I’d argue that Nadella has considered spinning off or even selling Xbox considering how it’s been going for them.

That doesn’t make sense, they spent billions on a shopping spree of game devs.

Their game pass business model, which is terrible for consumers once the rug pull happens, is making them a lot of money and market share

In the hopes of selling more consoles and that didn’t work.

Not sure if you have seen the recent news but things are not looking great there. Gamepass is not making them a lot of money at all. Even after acquiring Activision their operating margin is 3%

Big layoffs / studio closures coming in July, on top of the previous ones.

Internal memo: https://news.xbox.com/en-us/2026/06/10/next-100-days-xbox-re...

Spinning off Xbox: https://www.reuters.com/business/microsoft-has-considered-sp...

Most gamers think xbox is dead and Microsoft doesn't seem too sure either, they recently had a change in leadership but the whole division is not doing great and struggling. Game pass is not as popular as it used to be

Gamepass was never popular enough to justify the expenses and investments on the level they did.

They just thought growth will forever be exponential until they have a billion subscribers.

> Their game pass business model, which is terrible for consumers once the rug pull happens, is making them a lot of money and market share

How much money is it making, and how much market share?

> Their game pass business model, which is terrible for consumers once the rug pull happens, is making them a lot of money and market share

It seems more like their game pass price hike destroyed market share. Whatever revenue it yielded them now is sure to cost them in the long term because people viewed them as price gouging and moved to playstation.

I don't understand the model, tbh. It strikes me as more useful as a loss-leader to build market share at cost to the company and make money in licensing fees long-term. But as it is, the console seems doomed.

They should’ve done it a while ago before Microsoft acquired more studios.

I suppose it doesn’t really fit into a business that is so focused on enterprise so I wouldn’t be surprised.

Especially seeing as Windows is becoming less relevant to the typical consumer as well.

This would be incredibly foolish. The consumer value of windows has gone off a cliff, and while the Xbox hasn't been competing with the PS5, it's going to be a solid earner for decades. They just need to avoid another game pass catastrophe that destroyed trust with the consumer.

what was the game pass catastrophe?

Reply on news.ycombinator.com