Microsoft's Game Pass subscription service has fallen dramatically short of internal growth projections, currently holding 30 million subscribers against a company target of 77 million by mid-2026. The performance gap has prompted Xbox leadership to announce significant layoffs affecting over 3,200 employees, with CEO Asha Sharma citing slower-than-expected expansion as a contributing factor.

The service experienced membership declines following a price increase in October 2025, shedding millions of subscribers who have yet to fully return despite early recovery signs reported in June. The last public subscriber count of 34 million came in February 2024; the service remains well below previous peaks. Former Xbox CEO Phil Spencer had previously stated during regulatory proceedings that failure to exceed roughly 40 million subscribers by fiscal year 2027 would lead Microsoft to reconsider its continued involvement in the gaming business.