Microsoft’s Xbox division is facing some serious questions from people who helped build it. Rumors of layoffs are swirling as Xbox shifts its focus away from traditional hardware toward services like Game Pass and cloud gaming. Former executives aren’t shy about sharing their concerns.
Laura Fryer, a founding Xbox team member, posted a 13-minute video titled “The Future of Xbox,” where she didn’t hold back. She expressed confusion over the recently announced Xbox handheld, which is basically a Windows-based device. Fryer believes there’s no compelling reason for anyone to buy it, calling it a sign that Xbox might be stepping away from hardware completely.
“It’s one year from the 25th anniversary of the Xbox, and it looks like they’re abandoning pretty much everything that made the Xbox brand great in the first place,” Fryer said. “From my perspective, it looks like Xbox has no desire or literally can’t ship hardware anymore. This partnership is about a slow exit from the hardware business completely. Personally, I think Xbox hardware is dead. The plan appears to be to just drive everybody to Game Pass.”
She’s not alone. Mike Ybarra, former Xbox corporate VP and ex-Activision Blizzard head, took to Twitter to voice his thoughts. He described Xbox as “confused about who it is and what it should be,” urging the company to “pick your lane and stick to it.” Ybarra emphasized that most people still see Xbox as a video game console, not a catch-all brand for various devices and services.
“You’re drinking the Kool-Aid. You ask anyone on the street what Xbox is and 99% of the time they say a video game console. That is the identity. Period,” he replied when discussing Xbox’s broadening strategy.
Even current Xbox leadership, including Phil Spencer, have admitted that Xbox has lost the console war, which partly explains the pivot to cloud streaming, cross-platform distribution, and an aggressive push of Xbox Game Pass. However, the strategy appears to have cracks. The handheld and temporary VR partnerships feel disconnected from the core identity. Meanwhile, Xbox hardware prices have climbed sharply, perhaps discouraging sales. The promise of a future console generation lingers, but Xbox’s focus on Game Pass and handing some first-party games to PlayStation has raised eyebrows.
It’s a tough spot for a brand that once revolutionized console gaming. Former execs calling out the current path makes you wonder if Microsoft’s Xbox division is drifting too far from its roots. The rumored layoffs add more tension to an already uncertain future.
