Microsoft considered shutting down Xbox before major game developer acquisitions

Microsoft's Xbox nearly shut down before acquiring top game developers.

: Microsoft considered closing Xbox in 2021 due to underperformance. CEO Nadella chose to invest further by acquiring ZeniMax and Activision Blizzard. Despite these efforts, Game Pass struggles to meet subscription goals. AI is now a higher priority for Microsoft, lessening the impact of Game Pass issues.

Microsoft was on the verge of closing its Xbox division in 2021 but ultimately decided against it. CEO Satya Nadella opted to acquire ZeniMax Media for $7 billion and Activision Blizzard for $75.4 billion to bolster the Game Pass service.

Despite these acquisitions, Game Pass has failed to meet the ambitious subscription targets. Microsoft hoped for a 40% year-over-year growth and over 100 million subscribers by 2030, but these goals have been elusive.

Now, with AI as Microsoft's primary focus, Game Pass's struggles have a minimal impact on the company's stock. The shift to AI-related investments has been more important to shareholders than the underperformance of Activision.

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