Microsoft reportedly considered completely shutting down Xbox in 2021, prior to its acquisition of ZeniMax and Activision Blizzard.
According to The Information, Microsoft CEO Satya Nadella reportedly had the choice in 2021 of winding down Xbox, or acquiring more studios to drive Game Pass subscriptions. He chose the latter, purchasing both ZeniMax for $7 billion in 2021 and Activision Blizzard for $75.4 billion in 2023.
Some big-name studios have also reportedly have not been swayed by Xbox Game Pass, which doesn’t bode well for Microsoft’s internal target numbers. Prior to its acquisition of Activision Blizzard, Microsoft reportedly wanted to hit 100 million Game Pass subscribers by 2030, which would mean tripling its current base in five years. However, Microsoft has reportedly been unable to hit Game Pass internal growth targets in the past two years.
Microsoft also reportedly wanted other developers to rent its Azure servers after the Activision acquisition. Ironically, Activision reportedly still rents Google Cloud and Amazon Web Services while using its own servers for development, instead of utilizing Azure.
Since the launch of Xbox Series X|S, Microsoft has seen some ups and downs, including the closure of four of its own ZeniMax studios and lay offs last year. While many developers participate in putting their games on Game Pass, Take-Two CEO Strauss Zelnick said back in 2022 that it doesn’t make sense to put new releases into the service on launch day.
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