RIP Xbox Console And Game Pass. Hello, Xbox Publishing
For those of you finding this through LinkedIn... everything I write lives on Substack too. Here’s the link: patchnotesgaming.substack.com
GDC is two weeks out and I cannot wait. If you caught my last Patch Notes, you know my calendar fills up fast at these things, and this year is no different. For everyone who has already reached out and locked in time... thank you. Genuinely looking forward to it. For those still looking to find a window, I do still have some availability. Thursday is pretty open, and Wednesday afternoon on the 11th has some room too. If you want to grab coffee, grab a drink, talk attention economy, talk gaming intelligence, talk whatever you’re building... reach out and let’s make it happen.
Before I get into the Xbox thing, I want to shine a light on Mob Entertainment‘s Poppy Playtime for a second. I was planning to make this its own piece this week, and I will come back to it more formally as a case study. But given that the Xbox discourse was not dying down, it felt more urgent to address that first. So consider this a teaser.
Poppy Playtime is currently the number 4 game globally in mindGAME Data. Not number 4 in horror. Number 4 across everything. It sits alongside Roblox, Minecraft, and Free Fire. On TikTok it ranked number 4 among all games on the entire platform. On YouTube it ranked number 4 among all games last week. Steam numbers look mid-tier compared to the giant multiplayer titles, but Steam is not even Poppy Playtime’s primary platform. That is not where this IP lives. It lives on YouTube. It lives on TikTok. It lives in the imagination of every Gen Z and Gen Alpha kid who has been watching Huggy Wuggy content since Chapter 1 dropped in 2021.
This is mascot horror doing what mascot horror does when it works. Same lane as Five Nights at Freddy’s, Granny, Hello Neighbor. Internet-driven, YouTube-driven, built on a character that kids find terrifying and irresistible in equal measure. What makes Poppy Playtime different is the trajectory. Each chapter grows the audience rather than holding it.
The snowball keeps rolling. And now Legendary Pictures, the same studio behind Dune, the Minecraft Movie, and Godzilla x Kong, has secured the live action film rights. No release date yet, no cast, no director announced. But Legendary Entertainment does not take fliers on small IP. They took this deal in a competitive situation and beat out multiple other offers. When that film eventually lands, this franchise is going to have a moment that looks a lot like what Five Nights at Freddy’s had in 2023... except Poppy Playtime’s cultural footprint going in is already bigger.
This is a post-2020 IP. New. Original. No nostalgia to lean on. Dominating the attention economy on pure creative merit and savvy platform strategy. I will do a full case study on this one because it deserves it. For now just know... this is one of the most interesting growth stories in gaming right now and most of the industry is not paying nearly enough attention to it.
Now. About Xbox.
I was not planning on writing about Microsoft this week. I have read every piece. The Verge. The Game Business. The Stratechery deep dive. The LinkedIn hot takes, of which there were... many. I felt like I had seen every angle, and honestly, I was ready to do something a little more optimistic this week. Sprinkle some good news into the feed for once. Because Poppy Playtime just shot out of a cannon, and I really, really want to talk about that.
But here we are. When the CEO of the largest publisher in gaming steps down after nearly four decades at the company, and the presumed next-in-line exits entirely... that’s seismic. And I do have a perspective on this, one that I think is a bit different from most of what I’ve seen in the discourse this week. So before we get to the good stuff, let’s talk about Microsoft.
The Leadership Shuffle Everyone Saw Coming
Phil Spencer is retiring after 38 years at Microsoft, more than a decade of that leading Xbox Game Studios Publishing. Asha Sharma, most recently the president of Microsoft’s CoreAI product unit, is stepping in as the new Xbox CEO. Sarah Bond, elevated to Xbox president in October 2023 and widely considered the internal successor, is leaving Microsoft entirely. Matt Booty, head of Xbox Game Studios, has been promoted to EVP and Chief Content Officer.
That’s the news. And the Verge framed what it meant internally pretty clearly:
“Microsoft hitting reset button on Bond’s Xbox strategy instead of embracing it further.” - The Verge, February 23, 2026
And Sharma’s opening message to the organization made the direction of travel equally clear. Her phrase for what comes next:
“the return of Xbox”
Which, as the Verge noted, was a pretty unambiguous signal to the 10,000 people inside Microsoft Gaming about how the last few years had landed.
Then came the discourse. And oh boy.
A big chunk of the conversation this week was about whether Sharma is a gamer, whether someone with her background... Meta, Instacart, CoreAI... is qualified to lead a gaming company, and whether this appointment signals something deeply wrong at Microsoft. Some of it got genuinely uncomfortable to read. The fact that she is a woman stepping into one of gaming’s most prominent roles seemed to invite a particular flavor of scrutiny that, let’s be honest, would have looked very different if someone else had gotten the call.
Here is my honest take on all of it. It is the wrong conversation entirely.
Not because the questions aren’t interesting in the abstract. But because they operate on an assumption that isn’t true, which is that Xbox’s problems are recent, and that the right hire could have avoided them. Christopher Dring at The Game Business said it well:
“You don’t have to be a gamer to work in video games. You don’t have to have a gaming background to run a game company. The industry could do with some outside thinking, frankly.” - Christopher Dring, The Game Business, February 23, 2026
He pointed to Strauss Zelnick at Take-Two as the reference point. Openly not a gamer. One of the most successful operators this industry has ever seen. The job isn’t to play the games. The job is to build the business around the people who make them.
And the Verge made a point worth sitting with for a minute:
“The current presidents of Nintendo and Sony Interactive Entertainment aren’t known for being gamers either, managed to stay ahead of Xbox, albeit with their own stumbles. Being a gamer didn’t help Spencer, who saw some of where industry was going but wasn’t able to change Xbox enough to meet that moment.” - The Verge, February 23, 2026
That last sentence is the one that keeps getting lost. Being a gaming lifer, deeply and genuinely, did not save Xbox. Phil Spencer is as much a lifer as anyone who has ever held a leadership title at a major publisher. And the outcomes are what they are.
Here is my actual read on why that is. And it requires zooming out further than most of the takes this week are willing to go.
Okay, fair warning. I am about to quote Ben Thompson a lot. I know, I know. Bear with me. The thing is, nobody has really laid out the full arc of Microsoft’s gaming history in one place quite like he has... and part of what makes his perspective so sharp is that he was actually there. He has openly written about his time as a Microsoft employee in the early 2010s, which means his read on the internal culture, the priorities, and the particular brand of ambition that drove some of these decisions is not just analysis. It is firsthand context. I am not trying to just riff off his work here. I just think pulling it all into one place makes what is happening right now actually click. So here we go.
Xbox’s problems predate Phil Spencer. They predate Sarah Bond. They predate Game Pass, the Activision acquisition, and every strategic pivot of the last decade. To understand how we got here, you have to go back to what Microsoft actually thought Xbox was supposed to be in the first place.
Thompson put it plainly in a piece from 2014 that he was still quoting from a decade later:
“For many years now Microsoft has been focused on ‘Three Screens and a Cloud,’ the idea that they as a platform provider ought to have a presence on your desk, in your pocket, and in your living room, all tied together by the cloud. While that specific formulation arrived somewhere around 2009, that vein of thinking was central to Xbox’s creation; the console aspects were meant to be a trojan horse, giving people a reason-to-buy the Xbox and not a PlayStation; the more computer-type aspects would then be added over time until an Xbox was to living rooms what PCs were to every desk in every office and every home running Microsoft software.” - Ben Thompson, Stratechery, 2014, republished 2024
Xbox was never just a games console in Microsoft’s mind. It was the living room play. The consumer device play. The answer to Apple’s grip on hardware. This was Steve Ballmer’s Microsoft... a company that had watched the iPhone arrive, had tried to compete, had spent $7.2 billion acquiring Nokia and had essentially nothing to show for it. Microsoft had a deep institutional yearning to be a consumer brand. To have a device in your pocket and your living room the way Apple did. And Xbox was the one place where that dream was actually working.
A Decade Of Own Goals
So when the Xbox One launched in 2013, it wasn’t designed to just be a game console. It was designed to be the center of everything in your living room. The entertainment hub. The thing that controlled your cable box and your TV and your games all in one. And bolted on top of all of that was Kinect, a motion sensor camera that Microsoft made mandatory, bundled into every unit, and used to justify pricing the whole package at $100 more than the PlayStation 4.
I will be honest with you. I was there. I was a late adopter of PlayStation myself (after churning post PS2), and when I first moved to Los Angeles in the early 2010s I bought an Xbox One. Played a ton of Grand Theft Auto V on it, one of my favorite games of all time. And that Kinect sat in my living room and stared at me.
Here is what I remember thinking about it. This was Microsoft’s attempt to do what the Wii did... but years later, and without the thing that actually made the Wii interesting. The Wii worked because it was genuinely novel, affordable, and fun for people who had never touched a controller before. Nintendo found a completely new audience with it. And then every platform holder looked at the Wii’s sales numbers and thought... motion controls. That’s the thing. We need that.
So Microsoft built Kinect, which was technically impressive, genuinely interesting as a piece of hardware... and almost completely pointless as a gaming peripheral for anyone who just wanted to play Halo or Call of Duty or GTA. I did not want to jump around my living room waving my arms at the screen. I wanted to sit on my couch and play games. The Kinect went in a box pretty quickly. And not long after that, so did the Xbox.
That was the moment, personally, where I started migrating. PS4 first, then PS5, then PC gaming as my primary setup. I do not think I am unusual in that trajectory. And it is a very human illustration of what Thompson was describing analytically when he wrote about the Xbox One:
“Microsoft’s newest console is not only underpowered relative to the PS4, it’s also $100 more expensive due to the mandatory Kinect, and launched with a terrible wave of publicity surrounding its always-on nature. The Kinect and connectedness were both included to help the Xbox One fulfill its goal of being the primary box in your entertainment system, controlling not just games but also live TV with your voice. Unfortunately, it doesn’t work that well for entertainment, even as it has hurt Microsoft’s ability to compete for console buyers.” - Ben Thompson, Stratechery, 2014, republished 2024
Sony came out with a console that was cheaper, more focused, and did not require a camera watching your living room. The market gave its answer clearly. By the time Microsoft had dropped Kinect, dropped the price, and tried to course correct... the install base gap had opened up and it never fully closed. Thompson called the Xbox One generation, looking back from 2024, simply the moment when Microsoft lost the console wars.
What followed was Phil Spencer’s era. And to his credit, he recognized the hardware battle was effectively over and tried to find a different way forward. Game Pass was genuinely innovative. The Bethesda acquisition made sense on paper. The Activision deal was a massive swing. Thompson had actually been calling for the cross-platform, publisher-first approach for years before Microsoft got there... writing back in 2014 that the Minecraft acquisition would have been even better if Microsoft didn’t own Xbox at all, because the incentives would have been cleaner. He wasn’t wrong then.
And his 2024 piece, written when Microsoft first started going fully multiplatform, concluded with something that reads almost like a preview of this past week:
“Being a game publisher and cloud services provider is very much aligned with Microsoft’s overall strategy in the way that being a differentiated hardware provider is not. That it took them a decade to get to that point seems like a long time, but Xbox was a genuine point of pride for the company during its darkest days, and I can understand why it was given every chance to succeed.” - Ben Thompson, Stratechery, February 2024
A decade. That is how long it took to get here. And that timeline is why framing Asha Sharma’s appointment as the moment Xbox went wrong is such a fundamental misread of what is actually happening.
I wrote about the financial mechanics of all of this in a previous Patch Notes. The 30% accountability margin target, well above the industry’s typical 17 to 22% range. The member-weighted value credit system designed to backfill lost unit sales with time-weighted engagement metrics. Game Pass plateauing at 34 million subscribers against a stated goal of 100 million by 2030. The Verge put the unit economics problem plainly:
“Putting [Call of Duty] on Game Pass reportedly led to $300 million in lost sales. Game Pass keeps getting more expensive for consumers and it’s unclear if it’s recouping the losses of selling games directly.” - The Verge, February 23, 2026
And then there’s the acquisition math. $7.5 billion for Bethesda. $68.7 billion for Activision Blizzard. Thousands of subsequent layoffs. Studios shuttered. Projects canceled after seven-plus years in development... Everwild, Perfect Dark, Project Blackbird, gone.
None of that lands at Asha Sharma’s feet. The point is that whoever walked into this role was inheriting a situation years, arguably decades, in the making. The ship was already at sea. The sails were already out. She is the one holding the wheel now, and the most honest thing you can say about her position is that she may well become the scapegoat for decisions that were locked in long before she got the call. That is not a gaming story. It is a business story. And the business story is actually the more interesting one.
So let’s talk about where this goes.
The Console Is Dead. Game Pass Is Broken. Now What.
Look, I am going to be direct here. I think Ben Thompson is right. And I think the implications of that are actually more interesting than most of the discourse this week has been willing to go.
Thompson’s framing from his 2024 piece was already pointing at the destination before this week’s news arrived:
“Xbox’s Final Strategy... Microsoft is truly giving up on Xbox as a business driver and, to the extent they stay in hardware, it is simply to provide an entry point to Xbox Game Pass.” - Ben Thompson, Stratechery, February 2024
And now, with Sharma in the seat and Bond out the door, that strategy is not just implied. It is being executed. The “return to Xbox” language is not about returning to 2001. It is about returning to what Xbox actually needs to be in 2026, which is a profitable publisher operating across every platform, not a hardware company fighting a console war it lost a generation ago.
The Console Question
Let’s start with the console question because it is the most emotional one and probably the quickest to resolve.
Xbox Series X and S sold 1.7 million units last year. PS5 sold 9.2 million. Console sales have declined every single year since 2022. Hardware revenue fell 32% last quarter. Those are not the numbers of a platform fighting for relevance. Those are the numbers of a platform in managed decline. And the “Xbox everywhere” strategy that Sarah Bond built... games on PlayStation, games on Switch, cloud gaming on any screen... was already the white flag on hardware, even if it was never framed that way publicly.
Sharma’s own words from her first week in the role are worth reading carefully here. In her Windows Central interview she said:
“I want to make sure everybody knows I’m committed to Xbox, starting with the console. We’re going to keep meeting players where they are.” - Asha Sharma, Windows Central, February 25, 2026
Notice what she did not say. She did not say “the Xbox console.” She said “the console.” As in console gaming writ large. And then immediately followed it with “we’re going to keep meeting players where they are.” If they are on PlayStation, so be it. If they are on Switch, so be it. If they are on a Steam Deck or an Asus ROG Ally or any other OEM-powered handheld, so be it. That is not a hardware commitment. That is a platform commitment. And coming from someone who spent her career building monetization engines on top of existing user bases rather than fighting for new ones... that framing is not accidental.
The Game Pass Problem
Now let’s talk about Game Pass. Because I think Microsoft is about to go to church on this one, and honestly... it is probably the right call.
The day-one access model across the entire catalog at a subsidized price was never sustainable at the scale Microsoft needed it to be. I covered the mechanics of this in detail in my previous Patch Notes and in my piece on whether Big Tech can actually be good at gaming. The short version: Microsoft set a 30% accountability margin target for Xbox studios, well above the 17 to 22% industry average, and well above the 12% margin Xbox was actually running in court filings from 2022.
To paper over the gap between day-one Game Pass and lost unit sales, they invented an internal credit called member-weighted value, a time-weighted engagement metric meant to backfill what studios lost by not selling their games. If you put Call of Duty on Game Pass day one and it costs you $300 million in lost sales... the credit system is Microsoft’s attempt to make that math work on paper. It did not fully work.
The Opportunity Cost
And then there is the opportunity cost argument. Let me explain what I mean by that, because it gets lost in most of these conversations.
Opportunity cost is not a knock on gaming as a business. For most companies, owning a solid gaming portfolio is genuinely great. The margins might not be spectacular, but the scale makes up for it, and it compounds well over time. The opportunity cost argument only really bites when you are Microsoft specifically.
Microsoft is not most companies. They generate enormous margins in cloud, in enterprise software, in AI infrastructure. And the AI build is the real bill right now... and that bill is not just GPUs. As I wrote last October in EA Sells High, Xbox Charges Higher, it is power. In his Stratechery interview with Ben Bajarin of Creative Strategies, Thompson put it bluntly:
“Power is essentially one of the bigger scarce bottlenecks... we are up against an increasing demand of power, really an unprecedented demand of power.” - Ben Thompson, Stratechery
The buildout is five to ten years, not five to ten quarters. The cash math shows up in layoffs, in reorgs, in every decision to consolidate and simplify... keep the lights on for the AI highway, and make every package pay for itself.
So the question is not whether gaming makes money. The question is whether the ten minutes Satya Nadella spends thinking about gaming could compound more powerfully for shareholders elsewhere. Whether the CFO cycles, the board attention, the $7.5 billion for Bethesda, the $68.7 billion for Activision... whether all of that could have worked harder inside the cloud and AI business that the market is now pricing at an entirely different multiple. And the answer, when you look at the opportunity cost honestly, is probably yes. Not because gaming is bad. Because Microsoft is Microsoft. There are only so many hours in the day, even for a multi-trillion dollar company. And every hour and every dollar has an alternative use at this particular company that is very high value.
That is the context in which Sharma’s appointment makes complete sense. Satya Nadella did not hire a gaming person. He hired a platform and monetization operator. Someone who takes products that already have users and builds the economic engine on top of them. Messenger had the users. Instacart had the marketplace. CoreAI had the infrastructure. Xbox has Bethesda, Blizzard, Activision, Minecraft, and 40 other studios under Matt Booty. The content already exists. The distribution and monetization engine is what needs to be rebuilt.
Going To Church
So what does Game Pass look like if Microsoft actually restructures it sensibly? My optimistic bet is windowing. Not a prediction, not a leak... just what the math points to if you are trying to extract maximum value from this business before deciding what to do with it long term. And whether Microsoft holds onto Xbox publishing for a decade or eventually spins pieces off, the incentive is the same either way... get the economics right, get the margins up, and get as much cash out of this business as you can while you still own it.
There is actually a useful parallel happening in film right now. Tom Rothman, CEO of Sony Pictures, spoke recently about what the industry got wrong during the streaming window experiment. The conventional read was always about weekend-over-weekend drop off. But Rothman’s diagnosis cuts deeper:
“You’re not losing them in that weekend. You’re losing them in the opening weekend. That’s what’s happening... it’s the openings that are diminished because of cannibalization.” - Tom Rothman, The Town with Matt Belloni, February 2026
The studios had been looking at the wrong data point. The drop after the window looked fine. What they missed was that the opening itself was smaller because they had trained the consumer to wait. In film, shortening the window didn’t just move viewers from theaters to couches... it removed the urgency to show up at all. If a compelling story is coming to your living room in 60 days, why pay full price tonight?
The window isn’t just a revenue mechanism. It’s a FOMO mechanism. A long, firm window forces the hand of anyone who actually wants to experience the story now, before everyone else does, before the internet spoils it. Rothman was direct about what fixing the window actually produces:
“Disney now has the longest, most firm windows in the business... even where it’s their own service, there are 100 days to Disney Plus. Who has the only billion-dollar movies this year? Disney. I don’t think it’s a coincidence.” - Tom Rothman, The Town with Matt Belloni, February 2026
And then he zoomed out to the principle underneath all of it:
“The value chain in motion pictures is from successive windows.” - Tom Rothman, The Town with Matt Belloni, February 2026
That is the sentence that matters. The value chain runs through the window. Collapse the window and you collapse the chain. Gaming has a value chain too, and Game Pass has been quietly collapsing it for years.
In gaming, the damage runs even deeper than it did in film. Game Pass doesn’t just train players to wait... it trains them to treat games as disposable. As I wrote in The Game Pass Sugar High, day-one access removes the friction of purchase, and that friction was doing important work. When players pay $70 for a game, they invest time, they finish it, they talk about it, they build the kind of emotional connection that compounds into franchise loyalty. When it’s effectively free, they sample it and move on.
The data is stark. Non-Game Pass AAA titles average a 65% mindSHARE drop-off from peak. Game Pass titles average 93.5%. Indiana Jones and the Great Circle, strong brand, glowing reviews, prestige release... down 93% in record time. DOOM: The Dark Ages, one of gaming’s most beloved shooter franchises... down 92%. These were not mid-tier releases. They were marquee titles that got the sugar high at launch and then fell off a cliff.
That is what day-one Game Pass does to IP over time. It does not just cost Microsoft $300 million in lost Call of Duty sales in a single year. It quietly erodes the cultural staying power of the franchises that are supposed to be the long-term value of the business. If theaters can go to church and reestablish the window as the premium experience worth paying for... so can Game Pass. And the windowing model is probably how Microsoft starts reversing that damage.
Not the death of the service, but a fundamental rethink of what it is. Games window from premium release to Game Pass after a meaningful period, the same way films window from theaters to streaming. The day-one mandate goes away. Studios get to sell games at full price to the people who want them on launch day, and Game Pass becomes the back catalog and discovery layer rather than the launch vehicle. That preserves unit economics on the big releases, still gives subscribers genuine value, and stops the bleeding on lost sales.
The indie and live service tier probably stays closer to the current model. Day-one for a smaller title on Game Pass is a feature, not a loss. Day-one for Call of Duty is a $300 million problem. Those are two different situations that deserve two different answers.
Strip away the console hardware ambitions, restructure Game Pass around windowing, and what you are left with is actually a pretty interesting business. You are left with Xbox as a publisher. A very large one. With some genuinely remarkable assets.
And that is where the story gets more interesting than most people are giving it credit for right now.
Xbox As Publisher. Actually Not A Bad Story.
Let’s take the optimistic view for a minute. Because I think it is genuinely warranted, and most of the discourse this week has been too busy eulogizing Xbox to notice what the asset base actually looks like.
Strip away the hardware ambitions. Restructure Game Pass around windowing. What do you have left?
You have Minecraft. You have Blizzard Entertainment. You have Bethesda Softworks. You have Call of Duty. You have Forza Horizon 6 coming. You have Fable on the horizon. You have King quietly printing money on mobile. You have 40 studios under Matt Booty, who just got promoted to EVP and Chief Content Officer, which is not an accident. That is Satya Nadella telling you exactly what he thinks this business is now. It is a content business. And the content, looked at honestly, is genuinely remarkable.
I covered the Xbox Game Studios Publishing portfolio in detail in my previous Patch Notes and not much has changed at the macro level. Minecraft is still the largest gaming asset in the portfolio. Still the biggest game in the world by most meaningful measures. Still generating an extraordinary amount of attention and leading the whole portfolio by a wide margin. That case is made. What I want to do here is zoom in on the rest of the picture, because there is actually a lot more going on than the discourse this week gave credit for.
Blizzard Is Having A Moment
The acquisition sory that matters most right now is not Call of Duty. It is Blizzard.
The data coming out of the last few weeks looks like a company intentionally rebuilding momentum after years of drift. Not spiking on a single launch. Building something more durable.
Brian Rogers put together a sharp breakdown of this recently in our other mindGAME newsletter, and the Twitch numbers from a single seven-day window tell the story clearly. The top Blizzard titles cleared 31 million hours watched in one week. Overwatch ranked number one overall with 19.6 million hours. World of Warcraft came in at number seven with 8.8 million hours. Hearthstone at number 27 with 1.7 million hours.
And then the one that should get your attention... Diablo II at number 32 with 1.3 million hours. Diablo II. A game from 2000. Still moving the needle in 2026 because Blizzard shadow-dropped a Diablo II: Resurrected DLC for the franchise’s 30th anniversary, featuring a new Warlock class. That is a confidence move... a publisher that knows its audience.
What stands out is not just the numbers. It is the shape of them. Blizzard at its best is usually one franchise at a time going nuclear. This week it was multiple communities firing at once. That is the always-on Blizzard strategy working the way it is supposed to... scheduled franchise moments, dedicated beats for WoW, Overwatch, Hearthstone, Diablo, and then the occasional shadow drop to keep everyone on their toes. Treats franchises like networks. Not a game company waiting for launch day.
To put the mindSHARE picture in context: when Blizzard is just humming along between launches, their floor sits around 2% to 3% of the total market collectively. That is not nothing. That is a baseline most publishers would kill for. And when they actually land a major release, that number moves fast. Diablo IV pushed Blizzard upwards of 8% mindSHARE at peak. Right now, without a major new release, they are sitting at roughly 2.993% on content and community energy alone, with a clean upward trend into early 2026. That is not a spike. That is a ramp.
Overwatch specifically deserves a callout. On Steam... which is not even Overwatch’s primary platform, the game just hit a new all-time concurrent player peak of approximately 165,000 tied to a major update that dropped the “2” and repositioned the game as a forever platform. The day that update hit, there was a visible dip in Apex Legends, Marvel Rivals, and Deadlock at the exact moment Overwatch spiked. That is shared audience displacement. Blizzard is not just adding players. It is taking time from the most competitive segment of the market.
Blizzard has always been the king of the live service long game. World of Warcraft has been a forever game for over twenty years. Overwatch has been doing it for nearly a decade. These are tempo games with massive IP and communities that never fully go dark. The caveat is that Blizzard has been here before, and the trust deficit with its core audience after years of turbulence is real. But the 2026 posture looks different. If this cadence holds, the Activision Blizzard acquisition starts looking less like a $68.7 billion anchor and more like the crown jewel it was supposed to be.
That said... one note of caution on what’s coming... Blizzard officially announced Overwatch Rush this week, a top-down hero shooter built specifically for mobile, separate from the main Overwatch team. Not a port. A purpose-built mobile game. I am dubious. Warcraft Rumble is the cautionary tale here, and the post-ATT mobile environment has made it genuinely hard for any new title to break through at scale. Maybe Rush finds an audience in Asia, and honestly that is probably the real target market. But mobile Blizzard has not proven itself yet (outside Hearthstone), and I would not get ahead of the data on this one.
What I am actually more bullish on is the reported StarCraft shooter. Windows Central’s Jez Corden has confirmed it via his own sources, Jason Schreier reported it in his Blizzard book, and the headline for BlizzCon 2026 in September is widely expected to be StarCraft. This is a franchise that has been dormant for far too long. The last major release was StarCraft II: Legacy of the Void in 2015, and before that the IP spent years in the wilderness while Blizzard chased other things. The fanbase never went anywhere. The cultural footprint of StarCraft, especially in Korea and Southeast Asia, never really faded. It just went quiet. A serious return of this franchise is a meaningful moment for Blizzard and for the portfolio. We shall see what they actually show. But this one has me genuinely interested.
Bethesda: The Tentpole Machine
Bethesda is a different animal from Blizzard. Their games are not forever games in the live service sense. They are tentpole machines. Singular, massive releases that generate enormous attention spikes and then sustain through long tail engagement, modding communities, and the kind of word-of-mouth that keeps a game like Skyrim relevant fifteen years later.
The transmedia angle here is real and I wrote about it in detail in my Matthew Ball counterpoint piece. In 2024, Bethesda saw a huge resurgence driven almost entirely by the Fallout TV show pulling a new audience back into Fallout 4. Their collective mindSHARE hit 4.33% that year, on the back of a television series, not a game launch. That is the transmedia flywheel working exactly as it should... content in one medium generating demand in another. Nintendo has been doing this for years. Bethesda stumbled into it with Fallout and the smart move is to treat it as a repeatable strategy rather than a happy accident.
Then in 2025 they peaked again at 4.816% mindSHARE. Doom: The Dark Ages was relatively disappointing on its own, but collectively with the Oblivion remaster driving a lot of the lift, Bethesda had another strong tentpole year. When they have these big moments they can genuinely break through and drive enormous attention to the right IP.
And then there is the elephant in the room. Outside of GTA VI, one of the most anticipated games in the world is Elder Scrolls VI. Todd Howard confirmed just last week on the Kinda Funny Gamescast that the majority of Bethesda is now on the game, it is in a playable state internally, running on the new Creation Engine 3, and is returning to the classic Skyrim and Oblivion style RPG that the studio built its reputation on. Howard’s words were direct:
“We’re able to play it. We’re about to pass a big milestone internally, the majority of the studio is on the game and some of our partners.” - Todd Howard, Kinda Funny Gamescast, February 2026
Still a while away by his own admission. But this is not vaporware anymore. It is in active development, the studio is committed, and Howard even teased that the Oblivion shadow drop was a “test run” for how they might eventually release it.
And here is the number that tells you everything you need to know about what Elder Scrolls VI means for this portfolio. Skyrim, a 15-year-old single player game with no major online component outside its modding community, currently holds a 0.336% mindSHARE score and sits in the top 50 games globally. Right now. In 2026. No live service hooks, no battle pass, no season content pumping it up. Just the game and the community that never left.
Think about what that baseline tells you. The Oblivion remaster was a major event. The Fallout TV show was a major event. Both drove enormous spikes in Bethesda’s collective mindSHARE. And Elder Scrolls VI will play out at a much greater scale than either of those moments, because this is the franchise people have been waiting a decade and a half for. This is the S tier franchise in the Bethesda stable. When I think about what holds the next “death star” slot in the demand landscape... the position GTA VI occupies right now... Elder Scrolls VI is the answer on the Xbox side of the ledger. The anticipation alone will be a gravitational event. The launch will be something else entirely.
King: The Quiet Mobile Giant
Here is the one that almost never comes up in these conversations, which is wild because the numbers are substantial.
In mobile isolation, a brutally fragmented market where attention is scattered across thousands of titles and the competitive dynamics are unlike anything on console or PC, King owns roughly 2 to 3% of total mobile mindSHARE. That is led by Candy Crush Saga, which sits in the top ten on mobile by revenue and consistently inside the top 25 by downloads. The game is aging, no question.
But it has that spot, and it is genuinely hard to usurp a game that embedded itself into casual mobile culture the way Candy Crush did. Other King titles have come and gone. Candy Crush Saga remains. It is a cash cow, it generates real numbers in one of the most competitive markets in gaming, and it does it without the launch cycle drama, the sugar high problem, or the capital intensity of AAA development.
King does not generate headlines. It generates cash. And inside a publisher trying to get its margins to a place that makes Microsoft’s finance team happy, a quiet durable cash engine that owns a reliable slice of the world’s largest gaming segment is exactly what you want.
Call Of Duty: Down But Never Out
I wrote about this in detail in my Call of Duty piece from November, and the data was not pretty. Black Ops 7 was a B tier launch by the franchise’s own standards. Peak mindSHARE of 1.07%, rank 12 overall, the lowest launch score in the modern era. Battlefield 6 did not just edge past it... it generated roughly double the cumulative launch attention. The year-over-year drop from Black Ops 6 to Black Ops 7 was a 71% decline in launch mindSHARE, the steepest negative comp in the modern series by a wide margin.
To put that in portfolio context: Activision’s floor on any given week sits around 2 to 3% mindSHARE just from Call of Duty’s ambient presence in the market. When a CoD truly breaks through, that number climbs to 5, even 6% at peak depending on the year. This year’s launch only pushed the portfolio to around 2.4% mindSHARE at its high point. For the single biggest title in the entire Microsoft Gaming portfolio outside of Minecraft, that is a muted result. The franchise did not move the needle the way it is supposed to.
Two truths sit together here. First, even in a B tier year, Call of Duty is still enormous. A 1.07% peak with top twelve composite ranks would be a career high for most shooters. Second, the direction of travel was down, and the slope got steep.
But here is what the discourse misses. Historically, a down year for Call of Duty has been followed by a sharp swing back up. The jump from Vanguard to Modern Warfare II saw peak launch mindSHARE more than double, up roughly 105% year over year. The franchise has a pattern of overcorrecting, not just recovering. Black Ops 7 sets an easy comp. The weakest launch in the modern era is also the easiest floor to beat.
The complication is 2026. GTA VI is locked in for November 19th, squarely in Call of Duty’s traditional window. The Venn diagram of players who care about a military shooter and players who care about a massive open world crime saga is mostly one big circle. If Activision keeps the traditional late October or early November window they risk launching directly into GTA’s gravitational pull. The smarter play from an attention perspective is to move earlier, find clean October air, and build enough of a seasonal tail that players are still engaged when GTA arrives rather than immediately abandoning ship.
And then there is the transmedia moment that is just getting started. Paramount and Activision have confirmed a live action Call of Duty film with Taylor Sheridan and Peter Berg writing and directing. That is close to ideal fit for the franchise’s energy. Done right, the film becomes a top of funnel event that reminds lapsed players why they cared, introduces the brand to people who never touch shooters, and keeps Call of Duty in the cultural conversation in years when the games are not firing on all cylinders.
The attention flywheel works both ways. Games feed film, film feeds games. Call of Duty has lived off the first half of that equation for twenty years. Under a windowing model that stops bleeding $300 million in unit sales annually, and with a real transmedia play finally in motion, the next era of this franchise looks considerably different from the last one.
Do not count Call of Duty out.
Forza Horizon 6 And A Real Comeback Year For Xbox Game Studios
Lost in all the obituaries for Xbox this week... Xbox Game Studios is actually setting up for a genuinely strong launch slate this year.
Forza Horizon 6 is already the second largest unreleased game in our data right now, sitting at a cumulative mindSHARE of 0.704%, behind only Resident Evil Requiem which ships this week. By the time Forza launches, Requiem will already be out, which means Forza steps into the number one unreleased game position. And these scores tend to snowball as launch approaches. The trajectory is pointing up. I covered the broader pattern of unreleased games winning the attention economy in my Matthew Ball piece, and Forza fits that pattern cleanly.
The APAC angle matters here too. Forza is historically a western-dominant franchise. This installment is making a deliberate bet on a Japan-centered setting, which is exactly the kind of international audience expansion that Ball identifies as the only real growth story in the industry right now. That is not an accident. That is a franchise actively chasing the market that is still growing.
And then there is Fable. TBD in every meaningful sense. But the IP has a devoted audience and a tone that nobody else in the market is really occupying right now. If Playground Games sticks the landing it could be the kind of prestige release that reminds the market what Xbox first-party is capable of. Big if. Worth watching.
On its own, Xbox Game Studios sits at 7 to 10% of total gaming mindSHARE in any given window, and that is almost entirely on the back of one game. Effectively one in ten gamers at any given moment is engaging with something in the Xbox Game Studios portfolio, and the vast majority of that is Minecraft. Add one or two real breakouts alongside Minecraft and that number jumps fast. This is shaping up to be a real comeback year. Not a transformation. Not a redemption arc. Just a year where the portfolio actually performs.
The Math On The Whole Portfolio
Here is the number that ties this all together. Add up Xbox Game Studios, Activision, Blizzard, and King across their respective floors and you are looking at something in the range of 20% of total gaming mindSHARE. One in five gamers engaging with something in this portfolio at any given moment. That is not a struggling business. That is potentially the largest publishing footprint in the world.
And that is the whole point. Whether the end game is to own this position as the world’s dominant publisher, use it as a hedge while the AI capex story plays out, or eventually carve it up and sell the pieces for maximum value... none of those outcomes happen at current valuations with the current structure. The hardware story is over. The day-one Game Pass story should be over. What is left is an asset base that, managed correctly as a publisher, is genuinely dominant.
Get out of the way on Game Pass. Put the games on everything. Sell the games to people. Own the largest publishing throne in the world. And if you can’t make the margins work after all of that, at least you drove the valuation up to a place where the parts are worth more than they are right now. The job is to hoist it back up, franchise by franchise, release by release, and maximize the value to shareholders. Whether you keep it or not is secondary to that.
That is the optimistic case. And I think it is the right one.
The Spin-Off Game
I want Xbox to win this... to get out of their own way, embrace the publisher thesis, put games on everything, and make the margins work. I genuinely believe the asset base is there to do it.
But margins are margins. Numbers are numbers. And if Microsoft cannot get this portfolio to the returns that justify keeping it inside a company that is primarily in the business of cloud infrastructure and AI, then the conversation shifts from “how do we fix this” to “how do we maximize what we have before we sell it.”
And here is the uncomfortable truth about that second scenario. You cannot sell this thing whole. There is no buyer in the world right now who can or should absorb the entire Microsoft Gaming portfolio in one transaction. The hyperscalers... Amazon, Google, even Meta... are in the same AI capex race Microsoft is. They have the same margin pressures, the same board conversations about where capital should be deployed. Gaming is not the answer any of them are looking for right now. And a traditional media company does not have the balance sheet for an acquisition of this scale. So if divestiture happens, it happens in parts. The sum is worth more than the whole. That is just the math.
So let’s play the thought experiment out.
Activision and Call of Duty is the most obvious conversation. Tencent already co-develops Call of Duty Mobile for China. They know the IP, they know the audience, they know the business. If Microsoft ever needs to monetize this asset, Tencent is the first call. The strategic fit is cleaner than anything else on the board.
King is interesting because the mobile casual market has its own ecosystem of potential acquirers. Savvy Group has been on an acquisition run and the mobile gaming consolidation story is not over. A deal that separates King from the rest of the portfolio and puts it into a pure-play mobile publisher’s hands makes a lot of sense. The cash flow is durable enough to support a real transaction.
Blizzard is the most fascinating one to think about. NetEase is the obvious conversation, given the existing relationship and the China distribution history. But there is another name that keeps coming up in conversations that is not obviously wrong... Disney. Hear me out. Blizzard is based in Irvine, California, walking distance from Disneyland. The IP is not overly sexualized or graphically violent. The characters are beloved in a way that lends itself to theme parks, merchandise, and animation. World of Warcraft, Overwatch, Diablo, StarCraft... these are iconic universes with dedicated global fanbases.
Disney has been trying to figure out gaming for twenty years and has never cracked it. A Blizzard acquisition would not be cheap, and I genuinely do not know if the cultures would mesh. But as intellectual curiosity goes... it is not obviously wrong. Someone mentioned it to me in passing and it stuck. I am not ready to call it a prediction. But I am not laughing it off either.
Bethesda and ZeniMax is the one I find most compelling as a divestiture scenario. Given that Netflix was unable to land Warner Brothers Discovery and Paramount won that bid... Netflix needs a gaming IP strategy that goes beyond mobile ports and small studio acquisitions. The Bethesda portfolio is exactly what a company like Netflix would want if it was serious about gaming as a media business. Elder Scrolls, Fallout, Doom, Wolfenstein. Every single one of those franchises has a prestige television series waiting to happen. The Fallout show already proved the model works. Netflix buying Bethesda would be the most logical extension of that playbook. And... they have $2 billion in free money to spend.. so that might help matters.
If not Netflix, then another major studio looking to anchor a gaming division with real IP. Sony is always in the conversation. If this happened.. I would see it happening in the context of SIE buying the other gaming from Xbox, including Halo and Forza. And yes, the great irony would be that Bungie eventually gets to make a Halo game... but stranger things have happened.
Minecraft is the only one where I genuinely do not know the answer. Microsoft will not want to let it go. It is the crown jewel. The single most valuable gaming asset in the portfolio by attention metrics, by revenue, by cultural footprint. Who would even buy it at the valuation it would command? You are talking about one of the most recognized IP in the world, full stop, not just in gaming. I cannot see Microsoft willingly parting with it. Most analysts agree. It gets retained and rebuilt around whatever Xbox becomes after the hardware chapter closes.
But here is the thing about all of these scenarios. Whether Microsoft keeps the portfolio and runs it as the world’s dominant publisher, or whether it eventually carves it up and sells the pieces... the job right now is the same. Drive the valuation up. Every franchise that underperforms, every Game Pass cannibalization that erodes unit economics, every year of deflated mindSHARE on a title that should be breaking through... that is shareholder value leaving the building. The assets are remarkable. The structure around them is broken. Fix the structure, maximize the value, and then decide what to do with it.
Own it or sell it. Either way, you have to earn the right to do either one at a number that makes sense. Right now, Microsoft Gaming is not earning that right. The Asha Sharma appointment, the Matt Booty promotion, the Sarah Bond exit... these are signals that someone in Redmond has finally read the memo. The publisher thesis is the right one. The windowing model is the right model. The platform agnostic strategy is the right strategy.
Now go execute it.
What's funny is Poppy's Playtime was never seen as good mascot horror, so it's success is interesting.
Take-Two Interactive is really not a good example of non gaming lead. It's mostly successful for selling GTA sharkbucks to kids over producing games, and 2k sports. Makes money but Xbox should not follow their lead otherwise there really is just going to be the Roblox/Fortnite slop endless GaaS slopfest. Sort of why Overwatch 2 I can't really care about, there's only one "big game" a player can reasonably play, so they just make spinoffs to try and resell adjacent games to players who aren't interested.
Xbox is more about her being AI exec than a woman I think, everyone hates copilot. Sort of moot anyways, she can only go up or just fulfill everyone's expectations of Xbox exiting consoles and being like Sega in watching their game-making go down in response.
personally I think this will be a dead generation in gaming; people won't be able to afford gaming PCs, switch 2 isn't offering much over switch 1 ATM, and games will be harder/slower to make, and PS5 kind of wins by default but doesn't really have exclusives any more worth buying a console for.