Is Xbox Over? Insider Claims Microsoft May Scrap Next Console

During the XboxEra podcast, The Verge journalist and well-known insider Tom Warren commented on the rumors surrounding the next generation of Xbox. The discussion touched on forum user SneakersSO, who often appears when negative news about Microsoft and the Xbox brand emerges.

According to SneakersSO, troubling signs began to surface inside the company following the latest round of mass layoffs. Concrete plans for releasing new Xbox hardware are no longer guaranteed and have slipped into uncertainty, even though the console was originally expected to launch in 2026. The insider claims that key preparatory steps for the next generation of Xbox simply aren’t being taken.

In addition, another round of layoffs at Microsoft’s gaming division is reportedly planned for Q1 2026, on a scale similar to the last one. Compounding this, retailer Costco has already pulled Xbox from its shelves, and this is said to be only the beginning of a larger wave of retailers dropping the brand.

According to the insider, the future of Xbox as a platform lies less in consoles and more in publishing and leveraging Microsoft’s most profitable IPs: Call of Duty, World of Warcraft, Minecraft, Candy Crush, and Forza Horizon. The cloud will become Xbox’s primary “home,” with Game Pass increasingly positioned as the entry point to xCloud (with prices expected to rise even further).

Tom Warren later referenced SneakersSO, noting that the insider knows a lot about what’s going on inside Microsoft and is not a bad source overall. He emphasized that while SneakersSO does have genuine knowledge of internal processes, Warren himself has not confirmed the latest rumors about a possible cancellation of the next Xbox console.

Previously, former U.S. Federal Trade Commission chair Lina Khan said that the latest troubles around Xbox are a direct consequence of Microsoft’s 2023 acquisition of Activision Blizzard. Just recently, Microsoft significantly raised the price of Xbox Game Pass Ultimate, prompting a wave of subscription cancellations.