Microsoft is reportedly planning a major Xbox Game Pass overhaul with new tiers and optional cloud gaming, multiplayer, and console game add-ons.
Game Pass subscriptions and full-price Xbox game sales have sometimes been competing priorities inside Microsoft, according to former employees who spoke with Fortune.
The subscription service helped Xbox grow its recurring revenue, but it also ate into sales of first-party games, particularly during their launch periods. Different teams were reportedly working toward conflicting targets, with some prioritizing subscription revenue and others focusing on individual game purchases.
Asha Sharma took over Xbox in February 2026, replacing Phil Spencer as Microsoft looked to turn around its struggling gaming business. Her restructuring efforts have already affected staffing and studio funding, with more changes planned across Xbox.
Now, a new report has revealed what could be one of the biggest changes to Game Pass under her leadership.
Xbox Game Pass Overhaul Reportedly Planned With Cloud Gaming and Multiplayer Add-Ons
Microsoft is planning a major overhaul of Xbox Game Pass that would introduce a more customizable subscription model, according to a new Fortune report, citing people familiar with the strategy.
Under the reported plans, players would be able to select certain Game Pass features à la carte instead of relying entirely on preset subscription packages. The service would continue operating through a tiered structure, with optional add-ons for console-only games, cloud gaming, and multiplayer.
The potential changes could give subscribers more control over the features they pay for. Someone interested primarily in cloud gaming, for example, might have different subscription options than a player who only uses an Xbox console.
However, several important details remain unknown. Fortune doesn’t specify how much these new tiers or add-ons would cost, when the restructuring might happen, or whether existing Game Pass subscriptions would be replaced. Microsoft also hasn’t officially announced the proposed changes.
The reported overhaul comes as Xbox leadership reassesses how its subscription business fits alongside traditional game sales. Speaking with Fortune, Xbox chief content officer Matt Booty acknowledged that Microsoft’s previous gaming investments hadn’t always worked together as intended, saying the company “hadn’t connected the dots maybe as well as we should have.”
The financial pressure behind those changes is substantial. Fortune reports that Xbox is now a $21 billion business, yet a Microsoft measure of its profit margin has hovered around just 3%.
That’s well below what Microsoft CFO Amy Hood expects from the company’s major divisions. The $69 billion Activision Blizzard acquisition in 2023 also added pressure to generate stronger returns, particularly as Xbox manages a growing portfolio of major franchises, including Call of Duty, World of Warcraft, and Overwatch.
Sharma has wasted little time making changes. According to Fortune, Xbox has already eliminated 1,868 positions as part of plans to cut 3,200 jobs over the next year.
The company is also removing management layers and redirecting resources away from smaller studios toward teams responsible for its biggest franchises. More layoffs are reportedly planned for October, November, and January, although those plans could change.
Speaking about the pace of her restructuring efforts, Sharma told Fortune, “We are trying to get done an inordinate amount of things in an inordinate amount of time.” The report describes growing uncertainty among employees as successive rounds of layoffs continue, with some long-serving Xbox staff members already losing their jobs.
Beyond cutting costs, Sharma has set an enormous growth target for Xbox. Fortune reports that she wants the platform to eventually reach more than 1 billion daily active users, compared with approximately 100 million today.
The company is also exploring new ways to expand the commercial potential of franchises such as Minecraft, which it wants to compete more effectively with Roblox. Sharma made her ambitions clear during the interview, saying, “We’re here to be the No. 1 entertainment company.”
Giving subscribers more choices could be useful, particularly for those who don’t use every Game Pass feature. There is a risk, though, that splitting services into separate add-ons could make subscriptions more complicated.
Without pricing details, there’s no way to know whether the proposed model would save players money or leave them paying more for the same features.
Sharma is also redirecting financial resources toward Xbox’s biggest franchises and requiring studios to present stronger commercial business cases, according to Fortune.
The proposed Game Pass changes would be another part of that wider effort to improve Xbox’s financial performance.
Would you prefer an Xbox Game Pass subscription where you choose individual features, or would you rather keep cloud gaming and multiplayer bundled together? Let us know in the comments.
