Whiff, Whiff. The Sound of Microsoft Swinging and Missing at eGames and an AI Curve Ball
August 7, 2026
Another dinobaby post. No AI unless it is an image. This dinobaby is not Grandma Moses, just Grandpa Arnold.
I am not going to walk down that well-trodden path from 2022 when Microsoft put Google on its heels with its OpenAI announcement. I am not going to mention the money pumped from Microsoft to OpenAI. I am not going to bring up the Copilot AI plays, the organizational whoop-de-doos in the Softies’ smart software store room. And the layoffs? Nah. I just add those up these tiny AI quivers into one big whiff.
Strike outs don’t win games. Thanks, MidJourney. Very dramatic.
In this blog post I am going to bring up another big time, highly visible, and Bob and Clippy moment. Yep, the eGames whiff. It is special in its own Microsoft way: Think big, do what you know will work, fail. Quite a pattern.
I am not an eGamer. I know zero about online games. I did do a case study of the Telegram “hook kids into crypto” game Hamster Kombat. But the Microsoft games? Nada.
I read “Game Pass Was Supposed to Save Xbox – Instead, It’s Killing the Company.” Microsoft wanted to create the Netflix of online games. Pay a monthly fee. Get top flight games. Microsoft’s big idea did the whiff. The write up said:
The level of money Xbox poured into Game Pass is eye-watering – leaked internal documents show that the company was paying up to $300 million for Star Wars Jedi: Survivor and Suicide Squad: Kill the Justice League, and these are just some of the deals we’re aware of. Alongside licensing third-party triple-As, Xbox purchased a slew of studios with the intention of putting them to work on Xbox (and thus Game Pass) exclusives … None of these studios are money-printers. And so, perhaps inevitably considering Microsoft’s financial-first approach to game development, all three of those aforementioned studios (plus a few more) are no longer part of the Xbox studio stable, cast aside in profit-saving exercises.
The write up pointed out:
Game Pass needed a bonafide, yearly money printer – something like Call of Duty. Xbox’s decision to purchase Activision-Blizzard for a staggering $75.4 billion was two-fold: it absorbed the publisher’s extensive catalog into Game Pass, and it opened Xbox to the mobile gaming market via Candy Crush Saga maker King. Some questioned how this helped Xbox’s languishing hardware sales, and Phil Spencer answered: Xbox’s new strategy was forget the console, focus on the software. Perhaps the clearest example of this is the 10-year, non-exclusive commitment between Xbox and PlayStation for Call of Duty, which directly undermined the clear potential for a hike in Xbox hardware sales and consequential Game Pass subscriptions.
That did not happen. The author of the cited article said:
But technical competency was never Xbox’s problem. The real issue is the approach to content.
I disagree. My view of the problem is slightly more nuanced; to wit:
- Microsoft did a Bob and Clippy
- Microsoft’s management methods failed its stakeholders, employees, and eGame players
- Microsoft’s scrambling, layoffs, and wordsmithing are part of the firm’s game plan for failure. Sorry. A new playbook is needed.
Net net: Whiff. Whiff. The fact that both swings and misses took place is astounding. Will Microsoft get a hit or strike out? Is quantum computing for Azure approaching the plate?
Stephen E Arnold, August 7, 2026
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