Xbox is not doing well, and following the announcement that the company will cut 3,200 jobs in the coming months, many are wondering what went wrong. In her memo detailing the scope of the layoffs, Xbox CEO Asha Sharma revealed at least one factor: Game Pass “did not grow at the pace we expected,” she wrote.
According to a Wall Street Journal report, Game Pass currently has only 30 million subscribers. That number is significantly below the 77 million subscribers the company hoped to reach by July 2026, according to a document from the Federal Trade Commission’s investigation into Microsoft’s acquisition of Activision Blizzard.
During this investigation, former Xbox CEO Phil Spencer said these projections vastly underestimated the number of subscribers the service was expected to reach. He said that if Xbox Game Pass didn’t exceed the numbers shown during the hearing by fiscal year 2027 (a little over 40 million subscribers on Xbox alone), then the company would exit the gaming business: Microsoft’s 2027 fiscal year began on July 1, 2026, and it is quite short of that figure.
“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.”
While it’s possible that Spencer was exaggerating to make it seem like Xbox was in a worse position than it actually was — after all, he was trying to convince regulators that it should approve Microsoft gobbling up one of the biggest game publishers at the time — Sharma’s statement makes it clear that Game Pass has fallen short of expectations.
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The last time Microsoft publicly reported the number of Game Pass subscribers was in February 2024, when it said it had 34 million users. However, Xbox chief strategy officer Matthew Ball said the service lost millions of players after the company raised Game Pass prices in October 2025. Years later, it apparently still hasn’t recovered to its previous peak, which would explain why Microsoft hasn’t disclosed Game Pass numbers since then.
Sharma said in June that after eight-plus months of decline, Game Pass “has started to grow again,” but Microsoft’s game subscription service has a long way to go to reach what Xbox executives want from the offering.