It hasn’t been an easy year for Xbox. Summer saw massive layoffs across multiple studios and a flurry of cancelled projects. And just recently an increase to Game Pass prices saw many gamers revolting, with some downgrading or even cancelling their subscriptions. To make matters worse, Costco, the third largest retailer in the world, unceremoniously decided to stop stocking new Xbox consoles just last month. With all the trouble brewing in Redmond, it’s no surprise a rumor began circulating that Xbox would skip the next console generation entirely. But is there any truth to the claim?
Is Xbox’s Future in Publishing?
The rumor originated Friday 10/6 on NeoGaf via poster SneakersSO. Sneakers has some credibility, as they had previously tipped off some of Xbox’s moves in third-party publishing and AI. In the post, they hinted more layoffs were on the way in Q1 2026. Let’s be honest, that’s (unfortunately) one of the more believable rumors. But from there, Sneakers claimed plans for a next-gen console are uncertain.
“The ramifications of the CoD GP gambit not working out were just starting to get properly measured, but the thing that really stuck out to me was that suddenly, really concrete plans for actual MS Xbox HW went from being definitive, to up in the air, which was really startling given that this thing was meant to be out relatively soon. It was one of those situations where, despite folks being told ‘hey, we wanna pull the trigger on this in 2026’, the steps you would need to take in the lead up to delivering a new console gen weren’t being met. Lots of things that were ‘sure things’ started getting pushed. The Costco retailer pulling Xbox, and apparently they are one of many that we’ll learn about soon, told me all I needed to know.”
Sneakers went on to say Xbox’s future was in publishing, doubling down on their money-making IPs and using Game Pass as an entry point to the Xbox ecosystem. With the implication that more retailers will be dropping the consoles soon, it’s not an unbelievable theory. But a few days after the rumor first dropped, Microsoft decided to correct the record.
Supposedly, A New Console Is Still in Development
To quell speculation of a new console’s demise, Microsoft released a short statement to Windows Central:
“We are actively investing in our future first-party consoles and devices designed, engineered and built by Xbox. For more details, the community can revisit our agreement announcement with AMD.”
Indeed, in June 2025 Microsoft entered into a multi-year partnership with AMD to work on first-party hardware. It’s unlikely that a future Xbox console would be scrapped so soon after sealing such a contract. Still, SneakersSO post may not be entirely wrong. While plans may be in place for a new console, that doesn’t preclude missed deadlines or shifting priorities as the market continues to evolve. After all, selling a console is a lot harder when retailers are willing to drop you. And with all the negative press surrounding Xbox this year, this could all just be an exercise in saving face. But then again, maybe Xbox will turn it around and have something amazing to show us in a year’s time. If they haven’t laid off their entire company by then.
Sourced from Insider Gaming & Windows Central. For more coverage, check out our other games section.
