Microsoft Responds to Next-Gen Xbox Cancellation Rumors
Microsoft‘s future in the gaming world has been uncertain for some time. Rumors in recent weeks that Xbox’s next-generation console plans had been canceled have resonated strongly with the gaming community. Xbox Game Pass price hikes, declining sales, and retailers pulling consoles from shelves have raised serious questions about the brand’s future. However, Microsoft has finally broken its silence and made an official statement about the next-generation Xbox.
Microsoft Announces Next-Generation Xbox
In a statement released on October 5, 2025, Microsoft stated, “We are actively investing in the first-generation consoles and devices designed, engineered, and manufactured by Xbox.” With this statement, the company emphasized that it is not stepping back on the hardware front, but rather continuing its long-term plans.
Microsoft also highlighted its AMD partnership, announced in June 2025. Under this multi-year agreement, AMD will power the graphics engine of the next-generation Xbox console. The company claims that this partnership will elevate the gaming experience to a new level and deliver more advanced visuals. This suggests that Microsoft is still in the hardware development phase, despite rumors.
NeoGAF user SneakersSO sparked the controversy. SneakersSO, known for previously sharing accurate information about Microsoft, claimed that Xbox’s new console plans were “up in the air.” He alleged that the company had lost millions of dollars, particularly with the addition of Call of Duty to Game Pass, and that some employees had been told the next-generation console should be ready by 2026 at the earliest.
These claims have sparked a new crisis in the community, already upset by the Game Pass price increase. The Xbox Game Pass Ultimate subscription increase to $29.99 was met with backlash; the Xbox website temporarily crashed when thousands of users attempted to cancel their subscriptions the same day. Furthermore, some users noticed Game Pass ads on the home screen encouraging them to resubscribe. Another development that fueled the rumors was Costco’s withdrawal of Xbox consoles from sale worldwide. While the company described this decision as a “business choice,” gamers linked it to declining Xbox sales. SneakersSO further darkened the picture by claiming that other stores may be making similar decisions.
In light of all these developments, it’s believed that Microsoft has experienced a significant shift in its strategy. It’s being said that the company will focus more on its software side, particularly cloud gaming and service revenue. However, the latest statement clearly indicated that Microsoft hasn’t abandoned console production entirely. The question remains: How strong will Xbox be in the next generation amid rising prices, declining trust, and intense competition? We’ll begin to learn the answer as 2026 approaches.
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