An anonymous reader quotes a report from Ars Technica: Microsoft's revenue from Xbox console sales was down a whopping 42 percent on a year-over-year basis for the quarter ending in June, the company announced in its latest earnings report. The massive drop continues a long, pronounced slide for sales of Microsoft's gaming hardware—the Xbox line has now shown year-over-year declines in hardware sales revenue in six of the last seven calendar quarters (and seven of the last nine). And Microsoft CFO Amy Hood told investors in a follow-up call (as reported by GamesIndustry.biz) to expect hardware sales to decline yet again in the coming fiscal quarter, which ends in September. The 42 percent drop for quarterly hardware revenue -- by far the largest such drop since the introduction of the Xbox Series X/S in 2020 -- follows an 11 percent year-over-year decline in the second calendar quarter of 2023.

Microsoft no longer shares raw console shipment numbers like its competitors, so we don't know how many Xbox consoles are selling on an absolute basis. But industry analyst Daniel Ahmad estimates that Microsoft sold less than 900,000 Xbox units for the quarter ending in March, compared to 4.5 million PS5 units shipped in the same period. Overall, the reported revenue numbers suggest that sales of the Xbox Series X/S line peaked sometime in 2022, during the console's second full year on store shelves. That's extremely rare for a market where sales for successful console hardware usually see a peak in the fourth or fifth year on the market before a slow decline in the run-up to a successor. [...] Aside from hardware sales, Microsoft's gaming content and services revenue was up a healthy-sounding 61 percent year-over-year for the latest reported quarter. But a full 58 percent of that increase was the "net impact from the Activision acquisition," which you may remember cost the company $68.7 billion dollars.

merbs writes: Video games -- and the people who make them -- are in trouble. An estimated 10,500 people in the industry were laid off in 2023 alone. This year, layoffs in the nearly $200 billion sector have only gotten worse, with studios axing what is believed to be 11,000 more, and counting. Microsoft, home of the Xbox and parent company to several studios, including Activision Blizzard, shuttered Tango Gameworks and Alpha Dog Games in May. All the while, generative AI systems built by OpenAI and its competitors have been seeping into nearly every industry, dismantling whole careers along the way.

But gaming might be the biggest industry AI stands poised to conquer. Its economic might has long since eclipsed Hollywood's, while its workforce remains mostly nonunion. A recent survey from the organizers of the Game Developers Conference found that 49 percent of the survey's more than 3,000 respondents said their workplace used AI, and four out of five said they had ethical concerns about its use. "It's here. It's definitely here, right now," says Violet, a game developer, technical artist, and a veteran of the industry who has worked on AAA games for over a decade. "I think everyone's seen it get used, and it's a matter of how and to what degree. The genie is out of the bottle, Pandora's box is opened." The story adds: "At Activision, it was the same. 'A lot of 2D artists were laid off,' Noah says. The department was slashed. 'Remaining concept artists,' he claims, 'were then forced to use AI to aid in their work.' Employees, according to Noah, have been made to sign up for AI trainings, and its use is being promoted throughout the org."

Master Chief has fought his last battle at Paramount+. The streamer has canceled its video game adaptation Halo after two seasons. The show originally debuted in 2022. From a report: The series, based on the Xbox franchise and starring Pablo Schreiber as Master Chief John-117, finished its second season in March. "We are extremely proud of this ambitious series and would like to thank our partners at Xbox, 343 Industries and Amblin Television, along with showrunner and executive producer David Wiener, his fellow executive producers, the entire cast led by Pablo Schreiber as Master Chief and the amazing crew for all their outstanding work," Paramount+ said in a statement. "We wish everyone the best going forward."

Sources say the show's producers -- Amblin, Xbox and 343 Industries -- will look to land the series at another outlet for a third season. Paramount+ is said to be supportive of a possible move. "We deeply appreciate the millions of fans who propelled the Halo series to be a global success, and we remain committed to broadening the Halo universe in different ways in the future," reads a statement from 343 Industries. "We are grateful to Amblin and Paramount for their partnership in bringing our expansive sci-fi universe to viewers around the world."

The FTC says the across-the-board price increases that Microsoft recently announced for its Xbox Game Pass subscription service tiers represent "exactly the sort of consumer harm from the merger the FTC has alleged" when it sought to block Microsoft's merger with Activision. From a report: In a letter to the court posted as part of an ongoing appeal by the FTC in the case, the federal regulator alleges Microsoft's moves are a clear example of "product degradation" brought about by "a firm exercising market power post-merger." The letter's primary focus is on the soon-to-be-discontinued $10.99/month Console Game Pass tier. That's being replaced with a $14.99/month Game Pass Standard tier (a 36 percent price increase) that no longer includes "day one" access to all of Microsoft's first-party titles. To maintain that key benefit, "Console" subscribers will have to spend 81 percent more for the $19.99 Game Pass Ultimate tier, which also includes a number of additional benefits over the current $10.99/month option.

The FTC notes that these changes "coincide with adding Call of Duty to Game Pass's most expensive tier." Previously, Microsoft publicly promised that this Game Pass access to Activision's ultra-popular shooter would come "with no price increase for the service based on the acquisition." It's that "based on the acquisition" clause that's likely to give Microsoft some wiggle room in arguing for its planned pricing changes. Inflation is also a sufficient explanation for a large portion of the price increase in nominal terms -- the $14.99 Microsoft charged for a month of Game Pass Ultimate when it launched in 2019 is the equivalent of $18.39 today, according to the BLS CPI calculator.

Speaking of Xbox, the Xbox 360 Store and Marketplace are coming to a close later this month. From a report: Microsoft announced this last year and put an official end date of July 29, according to its official FAQ page. In case you didn't notice, the end of July is fast approaching. All of the games, DLC and any gaming tidbits for Microsoft's second generation console won't be available to purchase or download on the Xbox 360 console. Your games and movie purchases are still safe, however, if you've got any throwback titles on your Xbox One or Series X/S console. You can also still watch your purchased movies and shows on Windows 10 and 11 devices.

An anonymous reader shares a report: For years now, Microsoft's Xbox Game Pass has set itself apart by offering subscribers launch-day access to new first-party titles in addition to a large legacy library of older games. That important "day one" perk is now set to go away for all but the highest tier of Game Pass' console subscribers, even as Microsoft asks for more money for Game Pass across the board. Let's start with the price increases for existing Game Pass tiers, which are relatively straightforward:

"Game Pass Ultimate" is going from $16.99 to $19.99 per month.
"Game Pass for PC" is going from $9.99 to $11.99 per month.
"Game Pass Core" (previously known as Xbox Live Gold) is going from $59.99 to $74.99 for annual subscriptions (and remains at $9.99 for monthly subscriptions).
Things get a bit more complicated for the $10.99/month "Xbox Game Pass for Console" tier.

Microsoft announced that it will no longer accept new subscriptions for that tier after today, though current subscribers will be able to keep it (for now) if they auto-renew their subscriptions.

An anonymous reader shares a report: A new test version of Windows 11 is available for Windows Insiders on the Dev Channel with Build 26120.961, which rolls out a significant change: a new Windows Start menu. You'll immediately notice that Microsoft has redesigned the Microsoft user account display, moving it to the center of the Start menu as soon as you click on the username or profile picture.

This new "account manager" feature gives you quicker access to your various Microsoft accounts, such as Microsoft 365, Xbox Game Pass, and OneDrive cloud storage. To no surprise, Microsoft is using this prominent display to remind you of their own products and services. The difference to the current Windows 11 Start menu is obvious, as the following screenshot shows:

An anonymous reader shares a report: Sony plans to eventually stop producing consumer-grade recordable Blu-ray discs, but commercial products such as game and film Blu-rays will still be produced. Sony Group will lay off 250 employees at a division that produces recordable media discs, and start winding down the production of specific Blu-ray products, sources have told Japanese newspaper Mainichi.

However, contrary to recent reports, this decision will not affect Blu-ray discs that contain games, TV shows, or films. The staff reduction is happening to the Sony Sendai Technology Center, which produces recordable disc formats like CD-R, DVD-R, BD-R and archival discs for the Japanese region. Standard Blu-rays, 4K UHD discs, and PlayStation 4, PlayStation 5, and Xbox Blu-ray discs--which are made at Sony's separate DADC (Digital Audio Disc Corporation) facility--will still be manufactured, shipped, and sold worldwide. In other words, physical media will not go anywhere anytime soon, despite the prevalence and growth of streaming and/or digital media.

Microsoft's canceled Xbox cloud console, codenamed Keystone, has been detailed in a new patent spotted by Windows Central's Zac Bowden. From the report: Back in 2021, Microsoft announced that it was working on a dedicated streaming device for Xbox Game Pass. That device was later revealed to be codenamed Keystone, which took the form of a streaming box that would sit under your TV, cost a fraction of the price of a normal Xbox, and enable the ability to play Xbox games via the cloud. Unfortunately, it appears Microsoft has since scrapped plans to ship Xbox Keystone due to an inability to bring the price down to a level where it made sense for customers. Xbox CEO Phil Spencer is on record saying the device should have costed around $99 or $129, but the company was unable to achieve this.

Thanks to a patent discovered by Windows Central, we can finally take a closer look at the box Microsoft had conjured up internally. First up, the patent reveals that the console took the form of an even square with a circle shape on top, similar to the black circular vent on an Xbox Series S. The front of the box had the Xbox power button, and a USB-A port. Around the back, there were three additional ports; HDMI, ethernet, and power. On the right side of the console there was appears to be an Xbox controller pairing button, and the underside featured a circular "Hello from Seattle" plate that the console sat on, similar to the Xbox Series X. This patent was filed in June 2022, which was around the time when the first details of Xbox Keystone were being revealed.

Cruise, the autonomous vehicle unit from General Motors, named Amazon and Microsoft executive Marc Whitten as its new CEO, replacing former CEO and co-founder Kyle Vogt. CNBC reports: Whitten was a founding engineer at Microsoft's Xbox before leaving the company after more than 17 years to become chief product officer of audio company Sonos in 2014, according to his LinkedIn profile. He then worked at Amazon as vice president of entertainment devices and services before his most recent role as chief product and technology officer for software development company Unity's Create.

His appointment comes at a crucial time for Cruise, which is testing and relaunching its autonomous vehicles on public roadways. It ceased operations weeks after an Oct. 2 accident in which a pedestrian in San Francisco was dragged 20 feet by a Cruise robotaxi. A third-party probe into the October incident ordered by GM and Cruise found that culture issues, ineptitude and poor leadership fueled regulatory oversights that led to the accident. The probe also investigated allegations of a cover-up by Cruise leadership, but investigators did not find evidence to support those claims.

During that time, San Francisco-based Cruise was attempting to expand its operations into a revenue-generating business for GM, which has been a majority owner of the company since acquiring it in 2016. Other investors now include Honda Motor, Microsoft, T. Rowe Price, and Walmart. As of this month, Cruise has resumed supervised driving in Phoenix, Houston and Dallas, in addition to its ongoing testing in Dubai. It has not relaunched in San Francisco, where it remains under investigation related to the accident.

Activision has clarified Call of Duty: Black Ops 6 isn't 309GB after all -- or at least, you can download the core of it for less. From a report: This is despite Xbox's store page for the game stating that Call of Duty: Black Ops 6's install size is a rather chunky 309.85 GB. This made many heads turn, because that seemed excessive. The Call of Duty team has now issued a correction with more detail. Writing on social media platform X, Activision stated the file size currently listed for Black Ops 6 "does not represent the download size or disk footprint" for its upcoming Call of Duty game.

"The sizes as shown include the full installations of Modern Warfare 2, Modern Warfare 3, Warzone and all relevant content packs, including all localised languages combined which is not representative of a typical player install experience," it explained, before adding: "Players will be able to download Black Ops 6 at launch without downloading any other Call of Duty titles or all of the language packs."

Microsoft has announced a new lineup of Xbox consoles, including an all-digital white Xbox Series X with a 1TB SSD, priced at $450. The company is also retiring the Carbon Black Series S, replacing it with a white version featuring a 1TB SSD and a $350 price point. Additionally, a new Xbox Series X with a disc drive and 2TB of storage will launch for $600.

The move comes as Microsoft continues to focus on digital gaming and subscription services like Game Pass, with reports suggesting that the PS5 is outselling Xbox Series consoles 2:1. The shift has led to minimal physical Xbox game sections in stores and some first-party titles, like Hellblade 2, not receiving physical releases. Despite rumors of a multiplatform approach, Microsoft maintains its commitment to its own gaming machines, promising a new "next-gen" console in the future, potentially utilizing generative-AI technology.

Further reading: Upcoming Games Include More Xbox Sequels - and a Medieval 'Doom'.

Announced during Microsoft's Xbox Games Showcase, Doom: The Dark Ages is id Software's next foray back into hell. [Also available for PS5 and PC.] Doom: The Dark Ages is a medieval spin on the Doom franchise, taking the Doom Slayer back to the beginning. It's coming to Xbox Game Pass on day one, sometime in 2025.

Microsoft's first trailer for Doom: The Dark Ages shows the frenetic, precision gameplay we've come to expect from the franchise — there's a lot of blasting and shooting and a chainsaw. Oh, and the Doom Slayer can ride a dragon?
"Before he became a hero he was the super weapon of gods and kings," says the trailer (which showcases the game's crazy-good graphics...) The 2020 game Doom Eternal sold 3 million copies in its first month, according to Polygon, with its game director telling the site in 2021 that "our hero is somewhat timeless — I mean, literally, he's immortal. So we could tell all kinds of stories..."

Other upcoming Xbox games were revealed too. Engadget is excited about the reboot of the first-person shooter Perfect Dark (first released in 2000, but now set in the near future). There's also Gears of War: E-Day, Indiana Jones and the Great Circle, State of Decay 3, and Assassin's Creed Shadows, according to Xbox.com — plus "the announcement of three new Xbox Series X|S console options." [Engadget notes it's the first time Microsoft has offered a cheaper all-digital Xbox Series X with no disc drive.] "And on top of all that, we also brought the gameplay reveal of a brand-new Call of Duty game with Call of Duty: Black Ops 6."

Meanwhile, Friday's Summer Game Fest 2024 featured Star Wars Outlaws footage (which according to GamesRadar takes place between Empire Strikes Back and Return of the Jedi, featuring not just card games with Lando Calrissian but also Jabba the Hutt and a frozen Han Solo.) Engadget covered all the announcements from Game Fest, including the upcoming game Mixtape, which Engadget calls a "reality-bending adventure" with "a killer '80s soundtrack" about three cusp-of-adulthood teenagers who "Skate. Party. Avoid the law. Make out. Sneak out. Hang out..." for Xbox/PS5/PC.

An anonymous reader shares a report: Just before Microsoft closed its acquisition of Activision Blizzard, it said that it would take some time to bring the publisher's titles to Game Pass. We've only seen one such addition so far in the form of Diablo IV, but the company has announced another, somewhat notable one. Call of Duty: Black Ops 6 will be available on Game Pass on its release day later this year.

Microsoft is banking on the debut of a new Call of Duty title on its subscription service leading to a significant bump in the number of Game Pass members. It's a bit of a gamble, as for nearly every year in recent memory, the latest Call of Duty release has been the best-selling game. Microsoft is likely to see lower direct sales of Black Ops 6 on Xbox and PC, though it will still generate revenue from Game Pass and the PlayStation version (and perhaps even a Nintendo Switch release), as well as through microtransactions.

Microsoft plans a major shakeup of its videogame sales strategy by releasing the coming installment of Call of Duty to its subscription service instead of the longtime, lucrative approach of only selling it a la carte. WSJ: The plans, which mark the biggest change to Microsoft's gaming division since it closed the $75 billion takeover of Activision Blizzard, are expected to be announced at the company's annual Xbox showcase next month, according to people familiar with the matter. Call of Duty is one of the most successful entertainment properties ever, generating over $30 billion in lifetime revenue. Activision, which makes it, has long released new editions annually, selling about 25 million copies on average, selling for around $70 each in recent years.

Before the Microsoft deal last year, Activision was reluctant to fully embrace subscription-based models for a game that still attracts a premium price. Microsoft's subscription service, Game Pass, costs $9.99 to $16.99 a month, and provides access to hundreds of games from Microsoft and dozens of other companies.

In an op-ed on Windows Central, the site's co-managing editor Jez Corden laments Microsoft's "short-sighted" decision-making and "inconsistent" investment in its products and services, which he argues has led to a loss of trust among customers and missed opportunities in the tech industry. Despite Microsoft's advancements in AI and cloud computing, the company has made "baffling" decisions such as shutting down Windows Phone, under-investing in Xbox, and canceling promising Surface products.

The author argues that Microsoft's lack of commitment to security, customer support, and long-term quality has "damaged" its reputation and hindered its potential for growth. Examples include recent hacking scandals, poor customer service experiences, and the aggressive promotion of Microsoft Edge at the expense of user choice. The author also expresses concern over Microsoft's handling of the Xbox brand, particularly the decision to release exclusive games on PlayStation, which could undermine the reasons for customers to choose Xbox. The op-ed concludes that while Microsoft has the potential to be a leader in the tech industry, its pattern of short-sighted decisions and failure to learn from past mistakes has led to a growing sense of doubt among its customers and observers.

During a Bloomberg event today, Xbox president Sarah Bond said the company plans to launch a mobile gaming store to rival Apple and Google. "According to Bond, the as-yet-unnamed store will launch in July on web browsers, rather than a designated app, with Microsoft's recently-acquired Candy Crush Saga serving as a day-one tentpole franchise," reports GeekWire. From the report: Microsoft's entry into the mobile gaming market -- the most lucrative arm of the games industry -- has been anticipated, particularly since the company's recent $69 billion acquisition of California-based mega-developer Activision Blizzard King. In November, Xbox head Phil Spencer that the company was "talking to other partners" to potentially launch a mobile store.

The move sets the stage for a new competition between Microsoft and both Google and Apple, since most mobile games are sold and downloaded through their respective app stores. Bond told Bloomberg that the new Microsoft mobile store "goes truly across devices -- where who you are, your library, your identity, your rewards travel with you versus being locked to a single ecosystem."

The sudden closure of several video-game studios at Microsoft's Xbox division was the result of a widespread cost-cutting initiative that still isn't finished. From a report: This week, Xbox began offering voluntary severance agreements to producers, quality assurance testers and other staff at ZeniMax, which it purchased in 2020 for $7.5 billion, according to people familiar with the company's plans. Others across the Xbox organization have been told that more cuts are on the way. Employees were shocked by the unexpected shuttering Tuesday of three Xbox subsidiaries and the absorption of a fourth. The closures included Tokyo-based Tango Gameworks, which last year released the critically acclaimed action game Hi-Fi Rush. Tango was in the process of pitching a sequel, said the people, who asked not to be identified discussing nonpublic information.

During a town hall with ZeniMax staff on Wednesday morning, Xbox president Matt Booty praised Hi-Fi Rush but did not specify why the company had shut down the development studio behind it, according to three people who were in attendance. Speaking about the closures more broadly, Booty said that the company's studios had been spread too thin -- like "peanut butter on bread" -- and that leaders across the division had felt understaffed. They decided to close these studios to free up resources elsewhere, he said. Booty added that the shutdown of subsidiary Arkane Austin, the longtime developer of games such as Prey, was not connected to the performance of its new multiplayer game, Redfall, a critical and commercial flop.

Wesley Yin-Poole, reporting for IGN: Microsoft has closed a number of Bethesda studios, including Redfall maker Arkane Austin, Hi-Fi Rush and The Evil Within developer Tango Gameworks, and more in devastating cuts at Bethesda, IGN can confirm. Alpha Dog Studios, maker of mobile game Mighty Doom, will also close. Roundhouse Games will be absorbed by The Elder Scrolls Online developer ZeniMax Online Studios.

On Redfall, the disastrous vampire co-op game will now not receive promised updates as Microsoft has ended all development on the game. Microsoft said Redfall will remain online to play, and it will provide a "make-good" offer for those who bought the Hero DLC. In an email to staff sent by Matt Booty, head of Xbox Game Studios, Microsoft blamed the cuts on a "reprioritization of titles and resources."

In its third-quarter earnings call on Thursday, Microsoft reported a 30% drop in Xbox console sales, after reporting a 30% drop last April. "It blamed the nosedive on a 'lower volume of consoles sold' during the start of 2024," reports Kotaku. From the report: In February, Grand Theft Auto VI parent company Take-Two claimed in a presentation to investors that there were roughly 77 million "gen 9" consoles in people's homes. It didn't take fans long to do the math and speculate that Microsoft had only sold around 25 million Xbox Series X/S consoles to-date. That puts it ahead of the GameCube but behind the Nintendo 64, at least for now. Given the results this quarter as well, it doesn't seem like Game Pass and Starfield have moved the needle much. Maybe that will change once Call of Duty, which Microsoft acquired last fall along with the rest of Activision Blizzard, finally makes its way to Game Pass. Diablo IV only just arrived on the Netflix-like subscription platform this month. But given the fact that the fate of Xbox Series X/S appears to be locked in at this point, it's easy to see why Microsoft is looking at other places it can put its games.

Sea of Thieves, the last of four games in this initial volley to come to PS5, dominated the PlayStation Store's top sellers list last week on pre-orders alone. CEO Satya Nadella specifically called this out during a call with investors, noting that Microsoft had more games in the top 25 best sellers on PS5 than any other publisher. "We are committed to meeting players where they are by bringing great games to more people on more devices," he said. If players there continue to flock to the live-service pirate sim, it's not hard to imagine Microsoft bringing another batch of its first-party exclusives to the rival platform. Whether that means more recent blockbusters like Starfield or the upcoming Indiana Jones game will someday make the journey remains to be seen.