Microsoft Spent Nearly $80 Billion Chasing Xbox Game Pass Growth That Fell Short

Microsoft has spent close to $80 billion over the past decade on acquisitions and content deals aimed at growing Xbox Game Pass, but the subscription service has landed well short of the company's internal targets, according to a Bloomberg report on the events leading up to this week's Xbox layoffs and studio sell-offs.

Spending Outpaced Subscriber Growth

Bloomberg reported that the roughly $80 billion figure comes largely from Microsoft's acquisitions of Activision Blizzard ($75.4 billion) and ZeniMax ($7.5 billion), along with purchases of developers including Ninja Theory, Obsidian, and Double Fine. In a filing tied to the Activision proceedings, Microsoft said it was targeting 77 million Game Pass subscribers by the end of its 2026 fiscal year, which closed June 30. A source told Bloomberg the actual figure was 30 million — matching earlier reporting by The Wall Street Journal and sitting 4 million below the number Microsoft itself reported in 2024. According to Bloomberg's sources, Xbox employees had grown concerned that the subscriber base had peaked. The report said Microsoft was spending around $1 billion a year on third-party game deals to drive signups. Xbox CEO Asha Sharma said this week that the big bets made under previous leadership — Game Pass, studio acquisitions, and putting Xbox games on rival platforms — "did not grow at the pace we expected."

Price Hikes and Doubts About the Model

Xbox chief strategy officer Matthew Ball said in June that millions of subscribers canceled after Microsoft announced a 50% price hike in October 2025. Sharma later brought the price to $23 a month, still above the $20 charged a year earlier. Circana analyst Mat Piscatella wrote that Game Pass "failed" in part because of Fortnite and other "black hole games" that consume players' time, money, and attention, and because the service was never appealing enough to a mass-market audience. Bloomberg's sources also said some Xbox staff feared that putting expensive, launch-day games into Game Pass "could devalue them and cannibalize individual, higher-priced copies." Black Ops 6, the first new Call of Duty to launch into Game Pass, reportedly missed out on $300 million in sales — a figure Piscatella dismissed as "piracy math." This year's Modern Warfare 4 will instead be "windowed" for about a year before joining the service.

Studio Sales and Job Cuts

Microsoft is exiting five development studios as part of the reset. Double Fine and Compulsion Games are regaining independence, Ninja Theory and Undead Labs have been sold to unnamed buyers, and Arkane Lyon has entered a "consultation" process under French labor law. Sharma said it is "neither possible nor desirable to own every great independent studio." The company is cutting 3,200 jobs across its gaming division — 1,600 Xbox employees laid off this week, with another 1,600 to follow over the next year. Those losses are part of a wider round of 4,800 layoffs across Microsoft, about 2.1% of its global workforce. Sharma said that in a typical year, Microsoft lost 64 cents for every dollar it invested. The figures offer a rare public look at Game Pass's performance against Microsoft's own goals, arriving as the company sheds studios and cuts staff while resetting a strategy that has shaped Xbox for much of the past decade.