Microsoft’s Game Pass Fails to Meet Expectations, Xbox Boss Admits

A recent report from The Wall Street Journal has revealed that Microsoft’s Game Pass subscription service has failed to meet the company’s expected subscriber numbers. According to the report, Microsoft had anticipated that Game Pass would have around 77 million subscribers by now, but the current number stands at approximately 30 million.

This admission comes from Xbox CEO Asha Sharma, who recently stated in an email to staff that the company’s gaming strategy has failed. Sharma attributed the failure of Game Pass to the fact that it did not grow at the pace the company had expected, which in turn weakened the core business of Xbox.

The disappointing subscriber numbers have led to significant changes within the company, with 3,200 staff members at Xbox set to lose their jobs this financial year. The layoffs are part of a broader restructuring effort aimed at improving the company’s financial health. In addition, Microsoft has jettisoned four studios that were brought in to bolster Game Pass with new games.

The acquisition of Activision Blizzard for $69 billion was a key part of Microsoft’s strategy to boost Game Pass subscribers. The company had hoped to attract new subscribers by launching new Call of Duty games day one, but this strategy has failed to yield the desired results. In fact, the price increase for Game Pass in October 2025 was met with a decline in subscribers, with Matthew Ball, the current Xbox chief strategy officer, revealing that the price hike had caused Game Pass to shed millions of subscribers over the span of a few months.

Game Pass had around 34 million members as of February 2024, but the current number stands at approximately 30 million. Despite the disappointing subscriber numbers, Microsoft has managed to reduce the decline in subscribers by cutting the price of Game Pass and pulling Call of Duty out as a day one title. The company is now focusing on growing the service through new content and improving retention.

One of the key questions facing Microsoft is how it will grow Game Pass with what it has. The company may consider pulling more of its games out of Game Pass as day one titles, hoping for more direct revenue instead. Alternatively, Microsoft may need to adapt its strategy to make Game Pass more appealing to subscribers, possibly by making it more similar to Sony’s PlayStation Plus.

As the gaming industry faces its most severe hardware crisis in history, Microsoft must reset its Xbox strategy. The company has a unique opportunity to reassess its approach to Game Pass and make the necessary changes to ensure its long-term success.

Game Pass has been a key part of Microsoft’s gaming strategy, but its failure to meet expectations has significant implications for the company’s future. As the gaming industry continues to evolve, Microsoft must be prepared to adapt and innovate to stay ahead of the competition.

The future of Game Pass remains uncertain, but one thing is clear: Microsoft must take bold action to ensure the long-term success of its gaming strategy.