Xbox report #5

Xbox Report #5 brings a week in which Xbox simultaneously appears useful for players, but increasingly challenging for the industry around it. On one hand, Game Pass continues to receive new games and additional perks for subscribers, even when Microsoft does not announce it particularly loudly. On the other hand, more and more reports indicate that a significant shift in Xbox's strategy is happening behind the scenes, with possible game cancellations, the termination of publishing partnerships, and a new wave of layoffs.

First, we start with the lighter side of the story. Xbox Game Pass Essential, Microsoft's most affordable subscription tier, has quietly received five more games. At the beginning of July, Costume Quest 2 and all three titles from the Shadowrun Trilogy pack: Shadowrun Returns, Shadowrun: Dragonfall, and Shadowrun: Hong Kong were added to the lineup. A bit earlier, in mid-June, Full Throttle Remastered also joined Essential.

Interestingly, these games did not receive a major official announcement but simply appeared in the offering. Full Throttle Remastered is a point-and-click classic from Double Fine, Costume Quest 2 is a charming turn-based RPG, while the Shadowrun trilogy still has a good reputation among tactical RPG enthusiasts. For Essential subscribers, this is a solid boost, especially since these are games that do not require a large marketing spectacle but can fill the gaps between bigger releases.

Game Pass members in July are also receiving new Perks benefits. The offerings include add-ons for EA Sports FC 26, Where Winds Meet, Call of Duty: Warzone, Disney Speedstorm, Skate, Rainbow Six Siege, The First Descendant, Delta Force, and other games. Most perks are available to Essential, Premium, and Ultimate tier members, although some items, such as the Fortnite Crew subscription and Rocket League Rocket Pass, remain tied to Xbox Game Pass Ultimate.

Such perks may not be the reason someone would independently take a subscription, but they show how Microsoft is trying to maintain the value of Game Pass beyond just the games themselves. It is particularly interesting that the perks are increasingly linked to live service titles, cosmetics, boosters, and additional packs, which fits well into the broader strategy of tying players to the ecosystem.

Meanwhile, Pure Xbox warns of two games that could potentially be removed from the Xbox Store during July 2026. Nothing has been officially confirmed, but Funko Fusion and Star Trek: Legends are mentioned as possible candidates. Funko Fusion has recently received an exceptionally large discount of 95 percent, which has sparked speculation that the game could be close to removal, especially since it uses a large number of licensed content.

Star Trek: Legends is also an interesting case as it has reportedly already disappeared from the PlayStation Store and Nintendo Switch eShop, while at the time of writing it is still available on the Xbox Store and Steam. Since the removal of digital games sometimes comes without much notice, players who really want these titles might need to act in time, but it should be emphasized that their removal from Xbox has not yet been officially confirmed.

The more serious part of this week's Xbox Report relates to reports of Microsoft's internal cuts. The Verge states that Microsoft is considering closing at least five studios, spinning off or selling certain teams, and canceling specific games. Among the most notable names mentioned is Arkane Studios, a studio known for Dishonored and Deathloop, which is currently working on Marvel’s Blade.

According to the same report, Microsoft is reportedly considering canceling Marvel’s Blade, a game that was originally supposed to arrive earlier but has been internally pushed to a later date and, according to sources, has exceeded planned costs. Alongside Arkane, Compulsion Games, Double Fine, Ninja Theory, and Undead Labs are mentioned, with Microsoft reportedly exploring various options – from selling to spinning off, and in the worst case, even shutting down.

These pieces of information should currently be treated as reports, not as officially confirmed decisions. However, if proven true, it would represent one of the toughest moments for Xbox's first-party structure in recent years. After major acquisitions and a long emphasis on Game Pass as the center of strategy, Microsoft is clearly increasingly reevaluating where it wants to invest, which projects it wants to keep, and which studios fit into the new picture of Xbox.

An additional blow comes from IO Interactive. The studio known for Hitman and 007 First Light announced layoffs after its collaboration with an external partner on Project Fantasy, a new original fantasy IP, came to an end. According to reports, that partner was Xbox, specifically Microsoft’s publishing side. IO Interactive claims it remains fully committed to Project Fantasy, but the end of the partnership has evidently had short-term consequences for some employees.

Microsoft's message, according to Bloomberg's report, was that it is not reducing overall investments in games, but rather changing priorities and the types of projects it supports. This may be the most important sentence for understanding the current Xbox. It is not necessarily about a complete withdrawal from major investments, but a more selective approach in which some games, studios, and external projects will lose support if they no longer fit into the new strategy.

Thus, Xbox in July 2026 looks like a platform with two images. For the average player, Game Pass still brings new games, additional benefits, and a sense that the subscription is filled with content. For developers and studios associated with Xbox, the picture is significantly more uncertain. If the announced cuts are confirmed, this month could mark the beginning of a new phase for Xbox – less focused on breadth at all costs, and more on a stricter selection of projects that can justify their place in Microsoft’s ecosystem.