Microsoft Could Leave The Gaming Business If Xbox Game Pass Doesn’t Grow

Could there be a scenario where Microsoft and Xbox leave the gaming business altogether? According to Xbox head Phil Spencer, that answer is yes.

As part of the massive info leak from the Microsoft vs. FTC court case, one major bit of information came when Spencer was talking about Xbox Game Pass and the growth it needs. A leaked document shows a trajectory path for Xbox Game Pass subscribers over the upcoming years. The projections show the service passing 100 million subscribers sometime between fiscal year (FY) 2029 and FY30.

In response to being shown the projection document, Spencer said that Microsoft would “have to make a different decision with the business” should the numbers not grow quicker than projections. That could mean leaving it behind.

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Microsoft leave gaming

I do not believe that that is what the future Xbox business would look like. This is a presentation from our devices organization to the gaming leadership team, so this is the view from the team that is chartered with building our hardware on what the future business would look like.

I can fairly safely say that if we do not make more progress than this off of console, we would exit the gaming business. If this were the outcome, we would — I don’t believe we’d still be in the business.

A majority of our customers are found off of our own hardware, I would hope by earlier than 2030. So, when you asked me if I agreed with this chart that the light green and blue depending on what colors you see there would have to be much larger much earlier. I would say by FY26, ’27 that we should be in that position, or we’d have to make a different decision with the business.

Phil Spencer

Currently, Xbox Game Pass reportedly has over 30 million members. Insider Gaming has reached out multiple times for confirmation on that number, but no answer has been received.

What do you think of the idea that Microsoft would actually leave the gaming business and Xbox if Game Pass numbers don’t rapidly increase? For more Insider Gaming, check out Spencer’s full memo to Xbox employees after the leaks on Tuesday.