Everything About Xbox Reset: What's Been Cut, Paused, and Canceled

Microsoft's gaming division spent June swinging between a strong showcase and a wave of bad news. Asha Sharma took over as CEO in February after Phil Spencer left alongside his expected successor, Sarah Bond, and she moved to steady the brand: dropping the "This is an Xbox" campaign, cutting Game Pass prices after a 50% hike drove people off the service, and confirming new hardware under the name Project Helix.

On June 7 Xbox ran a large summer showcase and handed out hundreds of translucent green Series X consoles to fans who turned up. Three days later, Bloomberg reported that Sharma had lined up major layoffs starting in July, and she and content chief Matt Booty confirmed a "reset" over the following 100 days, blaming weak revenue, rising hardware costs, and pandemic-era overexpansion.

Full Xbox 2026 turbulence chronology:

• February: CEO Phil Spencer and successor Sarah Bond leave; Asha Sharma takes over as CEO with content chief Matt Booty.
• Early fixes: Xbox drops the "This is an Xbox" campaign, cuts Game Pass prices after a 50% hike, and confirms new hardware as Project Helix.
• June 7: Large summer showcase, with hundreds of green Series X consoles given away to attendees.
• June 10: Bloomberg reports major layoffs planned for July; Sharma and Booty confirm a 100-day "reset," blaming weak revenue, rising hardware costs, and pandemic overexpansion.
• June 15: Compulsion Games, Double Fine, and Ninja Theory reported as closure candidates.
• June 25: Third console price hike in 14 months. From August 1, 512 GB models up $100, 1 TB up $150; Series X hits $799.99, and the 2 TB model is phased out.
• June 29: Xbox reportedly pauses Game Pass deal talks with third-party studios; Modern Warfare 4 ads confirm it's not on Game Pass this year.
• June 30: Xbox pulls funding from IO Interactive's Project Fantasy; Arkane Studios reported at risk of closure, which would cancel Marvel's Blade (already slipped to late 2027).
• July 1: Sony announces no game discs after January 2028; The Verge reports Xbox is building disc-to-digital copies, similar to Nintendo's game-key cards.
• Undead Labs (State of Decay 3) added to the closure watch list.
• Reported plan: Sharma fast-tracks new Fallout and The Elder Scrolls entries.

The clearest early hit landed on a partner rather than an internal team. On June 30, IO Interactive said a relationship with an external partner on its own IP, Project Fantasy, had ended, and Bloomberg confirmed Xbox was the partner pulling out. IO will keep developing the team-based MMORPG but warned of staffing decisions tied to the funding loss. Losing Xbox as the publisher for Project Fantasy leaves an unproven online game without a backer, and IO built its recent momentum on 007 First Light, which sold 3 million copies.

Internal studios are under heavier threat. The Verge reported Microsoft is weighing the closure of Arkane Studio, the France-based team behind Dishonored, Deathloop, and Prey, which would cancel its Marvel's Blade game. Blade was set to launch this year before its internal ship date slipped to late 2027, and the project is running over budget. GamesBeat later added Undead Labs, maker of State of Decay 3, to a closure list already naming Compulsion Games, Double Fine, and Ninja Theory, whose game Senua debuted a trailer at the June 7 showcase. State of Decay 3 was shown at that same event and is slated for 2027.

The squeeze reaches deals that never closed. Game File's Stephen Totilo reported that 1666: Amsterdam could have been published by Xbox before Microsoft cut the funding, one of several bets from Patrice Désilets, the Romeros, and Hideo Kojima that Xbox had been backing. Consultant Fernando Rizo said on The Business of Video Games podcast that Xbox had suspended talks with third-party studios over Game Pass placement, describing the deals as paused rather than canceled while the company reassesses the service. I think the pattern matters more than any single cut, because a company pulling out of external IP, freezing indie deals, and eyeing four or five internal studios at once is not trimming, it's retreating from the spending that built the current lineup.

Game Pass itself keeps narrowing. Sharma removed new Call of Duty entries as part of April's price changes, and Activision is now running Modern Warfare 4 ads stating in all caps that the game is not on Game Pass this year. The hardware side got worse on June 25, when Microsoft confirmed a price increase for Xbox Consoles, the third in 14 months. From August 1, 512 GB models rise by $100 and 1 TB models by $150, pushing the Series X to $799.99 and the Series X Digital to $749.99, while the 2 TB Series X is being phased out. Microsoft tied the increase to storage and memory costs it says have climbed more than 2.5 times, with another doubling expected by the fall of 2027.

Not every change is a cut. On July 1, the same day Sony said it would stop making discs for games released after January 2028, The Verge reported Xbox is building a way to digitize physical discs: insert a disc, get a digital copy that can be sold or borrowed, similar to Nintendo's game-key cards. Sharma has also reportedly moved to fast-track new entries in Bethesda's biggest series. The Elder Scrolls 6 was announced in 2018 and has shown no footage since, and no new Fallout game has been announced despite the success of Amazon's 2024 adaptation. I expect both to surface in the months ahead, since reviving Fallout and The Elder Scrolls is exactly the safe, brand-first move a reset like this points toward.

Here’s the list of all Xbox Games Showcase 2026 announcements, the last major event after State of Play and Summer Game Fest, revealing more than 20 titles, including new Xbox exclusives. After that show, I thought for a moment, Xbox is great again.