Here we go again: even if the Xbox management confirmed a few months ago the production of the next Xbox, based on AMD hardware and full backward compatibility with the existing library, today a new rumor has emerged according to which Microsoft would be considering setting aside these plans in favor of a future purely as a software publisher.

According to what was revealed by a well-known insider, in fact, Microsoft would be planning radical changes for the Xbox brand in the coming months. Rumors speak of a new, massive wave of layoffs coming in the first quarter of 2026, but above all of the fact that the once solid plans for the next generation of consoles would now be "up in the air", with the possibility that they will never materialize.

According to these rumors, the future of Xbox would lie in the publication of games and no longer in hardware. The brand would focus on the most successful intellectual properties in its portfolio, such as Call of Duty, Minecraft and Forza Horizon, no longer worrying about producing traditional consoles.

These rumors were launched by insider SneakersSO on NeoGAF, a source who in the past has correctly anticipated Xbox's turn towards multiplatform publishing and plans to replace staff with AI tools. Its reliability was also somewhat corroborated by Tom Warren of The Verge, who suggested that the source "knows a lot about what happens internally".

Let's see his words below:

Without going into too much detail, shortly after the latest wave of layoffs (the next one is expected to arrive in the first quarter of 2026, by the way, and will be just as massive as the previous one), some rumors began circulating from Xbox that were a bit hard to believe.

The consequences of CoD's failed bet on GP were just starting to be properly assessed, but the thing that really struck me was the fact that suddenly the concrete plans for the MS Xbox hardware went from being definitive to being uncertain, which was really surprising given that this product was supposed to launch relatively soon. It was one of those situations where, despite being told "hey, we want to launch it in 2026", the steps necessary to get to the launch of a new generation of consoles were not taken. Many things that were "certain" have begun to be postponed. The fact that retailer Costco has withdrawn Xbox, and apparently it's just one of many we'll hear about soon, told me everything I needed to know.

To sum up: the future of Xbox is software publishing, with a focus on profitable IPs (CoD, WoW, Minecraft, Candy Crush, Forza Horizon), cloud gaming as the home of the "Xbox platform", the transition of GamePass which will basically become the xCloud access subscription (which will continue to increase its price, by the way, and are not done yet) and the release of their software on any device that has a marketplace and users willing to buy their titles.

Maybe some OEM will adopt the Xbox name, but given the clear collapse in popularity and trust in this brand, I'm not even sure if a third-party OEM will want to have an Xbox console when MS completes the reorientation of the division.

The words of the insider paint a decidedly worrying scenario for Xbox fans. The recent and controversial price increase of the Game Pass has already put the brand in a delicate position with its users. As pointed out by SneakersSO, the fact that a chain like Costco no longer sells Xbox consoles, and that other retailers may follow, is an alarming sign. The hypothesis is that Microsoft is betting everything on cloud gaming and its most profitable IPs, with the possibility of further price increases for its services.

As always in these cases, it is essential to remember that these are unconfirmed rumors and, as such, should be taken with due caution while waiting for official communications from Microsoft on Xbox's future strategy.