This Week in Tech (Audio)

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TWiT 1092: You Brought a Knife to a Wolf Fight - Apple Accuses OpenAI of Trade Secret Theft

Explore episode Jul 13, 2026

Where this was said

Microsoft's 4,800-Person Layoff and the Xbox Game Pass Collapse

At 41:14 · chapter starts 39:03

New Xbox head Asha Sharma oversaw the largest single gaming-sector layoff in years, with Microsoft eliminating 4,800 roles company-wide and 3,200 from Xbox specifically — roughly 20% of the gaming division. The financial reality Sharma cited was brutal: Xbox lost 64 cents for every dollar invested in a single year. Patrick Beja's post-mortem is detailed and damning: Xbox spent $80 billion acquiring studios to power Game Pass, projected 77 million subscribers by 2026, but peaked at around 34 million and has since declined. The engine of the car — big triple-A games like a new Elder Scrolls, a compelling Halo, or a Starfield that actually delivered — was never built. Patrick's theory: Phil Spencer respected studio autonomy too much to intervene, so no system-selling games ever shipped. The discussion also touches on Compulsion Games and Double Fine spinning off as independents, the complicated French labor laws shielding Arkane Lyon, and the damning irony that Xbox is still not exiting gaming despite 20 years of failure. Wesley Faulkner adds a structural critique: Microsoft's voluntary retirement program used an age-plus-tenure formula that Wesley argues is a new legal workaround for eliminating older workers — a template other companies will copy.

Business
Xbox's $80 Billion Disaster Explained

TWiT 1092: You Brought a Knife to a Wolf Fight - Apple Accu… · Jul 13, 2026 Business

Xbox spent $80 billion acquiring studios to fuel Game Pass and projected 77 million subscribers by 2026. They never got past 34 million. Patrick Beja's diagnosis: Phil Spencer was too respectful of studio autonomy, so no major triple-A titles ever shipped, and without system sellers, no one subscribed. Now 3,200 people are paying for that strategy.

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