With recent reports of potential layoffs hitting Xbox, Microsoft’s gaming division is clearly undergoing significant shifts. These changes and the current state of the brand have prompted some who helped build Xbox from the ground up to voice serious concerns about its future direction, especially regarding its identity and hardware strategy. The key takeaway? Experienced voices from Xbox’s past worry the company is moving away from what made it successful and questioning its core identity as a console maker.
Laura Fryer, a former Xbox executive and part of the original team that created the first Xbox console, shared her thoughts in a detailed video. From her perspective, which carries weight given her foundational role, Xbox seems to be losing its way just one year shy of its 25th anniversary.
Fryer is particularly puzzled by recent hardware announcements, specifically a planned handheld device. She argues there’s little reason for consumers to buy it. Why? Because, like the original Xbox, it’s built on a version of Windows. To her, this isn’t truly new or groundbreaking hardware.
She expressed sadness seeing the value she helped create “eroded away.” Fryer believes Xbox might be slowly exiting the hardware business entirely, suggesting recent partnerships are part of a plan to move away from building consoles themselves. Her blunt assessment: “Personally, I think Xbox hardware is dead.” The apparent goal, she says, is simply to push everyone towards the Game Pass subscription service.
Just a day later, Mike Ybarra, former corporate VP of Xbox and ex-head of Activision Blizzard, echoed similar sentiments. He took to social media, stating it’s “tough to see Xbox confused about who it is and what it should be.” He acknowledged the great people still working there but stressed that the company needs to figure out what needs to change “and fast.”
When a fan brought up the “everything is an Xbox” strategy – Microsoft’s idea of extending the Xbox brand beyond just the console to PCs, cloud, and other devices – Ybarra pushed back. He argued that for 99% of people, Xbox is the video game console. That, he said, is its true identity, period.
Even current Xbox leadership, like Phil Spencer, has openly stated that Xbox has lost the “console war” against competitors like PlayStation and Nintendo. This difficult reality is the driving force behind their push into new areas: getting games onto other platforms, investing heavily in cloud streaming, and making the Xbox Game Pass subscription the central focus.
The familiar green Xbox logo, representing Microsoft’s gaming brand amidst discussions about its future strategy.
The familiar green Xbox logo, representing Microsoft's gaming brand amidst discussions about its future strategy.
However, from the outside – and now, it seems, from some former insider perspectives – there appear to be significant challenges with this strategy. Fryer and Ybarra highlight several issues: relying on partnerships for hardware like the handheld, the idea of branding non-Xbox devices as “Xbox-adjacent,” the increasing prices of Xbox consoles (which makes them less appealing to buy), and the strategy of releasing major first-party games on competing platforms like PlayStation. While Microsoft maintains it will build future consoles, other moves seem to contradict this. The relentless push for Game Pass also faces challenges, potentially hitting a “subscription ceiling” where growth slows down.
These points become even more critical when they are being raised by executives who played key roles in shaping Xbox’s past success. The concerns from Fryer and Ybarra underscore that these aren’t just outside observations but worries shared by those with deep knowledge of the brand’s history and challenges.
With potential layoffs looming, it’s clear that Microsoft and Xbox are at a pivotal moment. The critiques from former leaders highlight the urgent need for clarity and a potentially different approach for the future.
