Microsoft’s enshittification of Xbox, Surface, and even Windows itself, are by design — with greed and corner-cutting replacing innovation

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Around two weeks back, I penned down an article discussing Xbox’s transformation after a successful Xbox Showcase and a strong promise towards hardware. There were rumors suggesting that Xbox might relinquish its hardware goals to manufacturers like ASUS, potentially leaving their in-house hardware teams and customers in a state of ambiguity. Moreover, Microsoft’s gaming finances sometimes appear less than robust at first glance, casting a shadow over the entire platform.

How naive of me.

Yesterday, it was announced that Microsoft plans to let go of approximately 9,000 employees, which would bring the yearly total to over 15,300. A significant number of these job losses are happening at Xbox, with cuts affecting various parts of their product lineup seemingly without discrimination.

Long-serving employees from Xbox, whose contributions accounted for millions of dollars in earnings, were let go. Prominent figures from leading studios were dismissed, projects were terminated, and in a severe move, an entire studio was disbanded.

In the gaming community that uses Xbox, there’s a recurring joke that Xbox dies every few minutes due to Microsoft’s constant shifting strategies and inconsistent communication, which has left both customers and employees puzzled in recent years. Interestingly, today Microsoft revealed that Helldivers 2 will be available on Xbox, marking the first time a PlayStation-published game appears on the platform. Unfortunately, this announcement seems to have come at an inconvenient moment, as it fuels the ongoing debate about Xbox’s vitality. However, it’s essential to note that this pattern of unpredictability is not exclusive to the Xbox division; it’s a trend seen across various departments within Microsoft.

For the past decade, I’ve been delving into the realms of Xbox, Windows, Surface, and Microsoft beats. My journey began as a novice blogger, purely passionate about Xbox, with minimal understanding of the tech industry or business world in general.

Over time, I’ve amassed a wealth of knowledge from my various experiences, including triumphs, blunders, overestimation, and underestimation of myself. Throughout this journey, I’ve maintained a passion for Xbox, its community, and the broader gaming hobby. I’ve been vocal about issues, expressing the concerns of users. We collectively advocated for more Japanese games on Xbox, better localization, and enhanced Xbox PC experience. Microsoft responded in varying ways, yet the continuous flow of conflicting messages, shifting strategies, and inconsistency is detrimental to both customers and employees.

It seems increasingly difficult for many people, including developers, potential employees, and customers, to continue supporting Microsoft under the leadership of CEO Satya Nadella and CFO Amy Hood. The company appears to lack direction due to frequent strategy changes and has been letting go of thousands of employees in the process, which gives an impression of inconsistency.

Under Satya Nadella and Amy Hood, Microsoft has become a glorified investment bank, bereft of delivering innovation

Unidentified sources within Microsoft, unable to discuss internal affairs publicly, have strongly suggested that the massive layoffs from yesterday were Amy Hood’s fault, as she set unrealistic financial targets for different Microsoft departments. These high expectations have inadvertently fostered a climate of fear and uncertainty, which negatively affected productivity and ultimately the company’s profitability.

Some Microsoft employees believe that a significant number of job cuts are linked to a wider transition toward artificial intelligence (AI). Top executives and influential investors are reportedly worried that Microsoft might be falling behind or has already lagged in the AI competition.

It’s widely known that the partnership between OpenAI and Microsoft has become strained, with OpenAI eager to break free from the limitations imposed by their early investment agreement. Microsoft currently holds exclusive rights to several aspects of OpenAI’s operations, such as first refusal for hosting AI workloads and revenue sharing obligations. However, OpenAI no longer grants Microsoft exclusive hosting privileges for its services. Notably, all these agreements will expire in 2030. This has investors concerned, as Microsoft’s AI achievements might be entirely reliant on OpenAI, which is rapidly losing key talent to Meta at an accelerated pace.

At an early development phase, it wouldn’t be surprising if a significant advancement on a rival platform, especially one as influential as Meta with its popular global social apps, could potentially disrupt OpenAI within seconds. This would mean that Microsoft’s role in AI would vanish instantly, effectively handing over the future of technology to other tech companies.

In simpler terms, Microsoft’s AI products, which often utilize OpenAI models, are generally disappointing when put into practice. For instance, Copilot is a less advanced version of ChatGPT, and the “Microsoft 365 Copilot” has severe limitations. Even basic functions like the generative erase in the Photos app are outperformed by Samsung’s offerings. Microsoft’s internal projects mainly consist of tech demos and promises, but there are no tangible, useful products to show for them yet.

Microsoft’s primary offering, Windows Recall, is generally disliked and considered a significant privacy concern, despite Microsoft’s efforts to improve it. The associated Copilot+ PC line has failed miserably, compromising the reputation of the Surface brand in the process.

There’s a feeling among some Microsoft executives and activist shareholders that they regret investing heavily into Call of Duty and Activision-Blizzard, favoring broader early AI investments instead. If Microsoft hadn’t spent $80 billion on purchasing Activision, they might have had around $160 billion to reinvest in AI initiatives worldwide, potentially altering their current trajectory.

During the pandemic, as gaming saw a significant surge, Xbox cleverly secured the division’s future by persuading Microsoft to invest in the company behind Call of Duty and World of Warcraft. However, after the pandemic, with gaming expenditure decreasing significantly, Xbox now faces increased pressure to sustain substantial, unrealistic profit margins.

Microsoft treats its consumer businesses like a utility, forgetting the human element

Under the leadership of Satya Nadella, Microsoft appears to have overlooked the fact that actual people, or customers, utilize its products, and it seems that these same people also contribute to building those products. In simpler terms, it gives the impression that Microsoft has lost sight of the human aspect in product development and usage.

Last year, when the Windows Recall privacy scandal unfolded, I found myself wondering, “How on earth could this have been avoided?” The revelation that Microsoft was releasing an app with such intrusive capabilities, essentially spying on everything you do on your screen, struck me as a clear example of ‘product design by numbers’. It appeared to be the brainchild of a corporate boardroom, where the notion that AI is beneficial because people use it had been casually thrown around without much thought or scrutiny.

The entire Copilot+ PC line exudes a lackluster, hastily developed, and thoughtless design philosophy that has been characteristic of Surface products ever since key architects Panos Panay and Ralf Groene departed from the company. Notably, Panay is now constructing an elite team at Amazon instead.

As a tech enthusiast, I can attest that Surface devices were once trailblazers in hardware innovation, crafting eye-catching products that even Apple couldn’t help but take notice. However, it’s no secret that execution wasn’t always flawless.

However, under the leadership of Panos Panay, Surface has transformed into a dependable mainstay on Microsoft’s product calendar, sparking waves of innovation and design improvements that rippled throughout the entire Windows OEM ecosystem.

By 2025, Surface will barely resemble its earlier form – reduced to a mere shadow of its past glory, as Microsoft seems to employ it as a tool to cater to whatever trendy technology Satya Nadella happens to be fascinated with at the moment. The spirit of genuine innovation within Surface appears to have faded away, which is regrettable.

Under the leadership of Satya Nadella, Microsoft has a peculiar talent for making grand announcements that generate buzz, but unfortunately, they often lack the necessary investment and follow-through, resulting in disappointing deliveries. This is evident in their projects such as Windows Mixed Reality, the “metaverse” term from 2023, Windows Phone, Microsoft Band, and their gradual attempts at Windows on Arm compatibility.

Currently, the scenario seems strikingly similar to Copilot unfolding gradually, yet the $80 billion investment isn’t something to underestimate; it appears to be more about bolstering other services rather than Microsoft spearheading its own creative breakthroughs. Previously, Microsoft Build events were renowned for sparking developer enthusiasm and driving consumer product innovation, filled with thrilling new product unveilings and service upgrades. However, now they seem less vibrant and more geared towards attracting investors, reflective of Nadella’s management style within the company.

In essence, I argue that Microsoft has shifted its focus from being a product innovator to an investment bank. Instead of focusing on creating new products, they tend to flood a market with money and acquisitions, only to later neglect the quality of the product, eventually abandoning it when the next big tech trend emerges. This pattern is reminiscent of locusts swarming an area. Furthermore, there have been numerous instances of compromised security, such as the massive Azure email hack and global Crowdstrike vulnerability, which are just a few examples in a long list that span my entire career and beyond.

This week’s layoffs primarily affected areas outside of Xbox, but I question whether Xbox can prosper under the corporate structure led by Amy Hood and Satya Nadella, where investment priorities outweigh customer trust and employee welfare. However, money continues to flow, which seems to render these concerns irrelevant.

Microsoft as a company has no mission or ethos — perhaps it never did

For quite some time now, I’ve voiced my concerns about Microsoft’s corporate strategy, feeling that they overlooked their Xbox division’s day-to-day activities. However, it seemed as though Xbox was operating in a bubble, largely unscathed by Microsoft’s broader decisions. That is until the acquisition of Activision-Blizzard came into play.

This summer, my lack of insight as a contemporary Xbox enthusiast reached a pivotal moment during the Summer Game Fest. Over the course of my experience, I had assumed that Microsoft organized Xbox FanFest events at gatherings such as Gamescom and E3, inviting countless fans to join in activities. It seemed that Microsoft strategically fostered their fan community through these endeavors, and they have demonstrated this approach with products like Windows Phone, Surface, and more in the past.

This summer at Summer Game Fest, Microsoft didn’t host their own Xbox FanFest. However, long-time attendees who cherished the sense of community and fellowship decided to pitch in and fund an independent Xbox FanFest event in LA. It was heartening to witness this display of community spirit, but on the downside, it was disheartening that Microsoft didn’t provide the necessary funding. Given that Microsoft is nearing a $4 trillion market capitalization with $22 billion in profits last quarter, one might wonder why they couldn’t have spared a small amount to organize an event for fans this year? Couldn’t CEO Satya Nadella have contributed some of his $79 million stock awards from the previous year towards this endeavor?

As a tech enthusiast, the ambiguity surrounding Xbox exclusives and the unclear direction of Xbox in general didn’t sit well with me. I tried to brush it off as just a transitional phase, with budgets getting tightened and gaming hours dwindling. Most of my gaming time and money were being funneled into Fortnite and Roblox, and economic confidence was at an all-time low. However, this week’s layoffs have given me pause, leaving me wondering about the future of Xbox.

These recent terminations appear to be blindly sweeping – a harsh and narrow action primarily focused on increasing profits, disregarding everyone and everything else. Whole teams are being eliminated, leaving families uncertain about their future. People who’ve invested significant parts of their lives, effort, and emotion, have been contributing towards enriching Microsoft shareholders and executives. Friends who’ve worked together for years, collaborating with developers, fans, and the press – some of whom were instrumental in generating millions of dollars in revenue that further enriched shareholders.

It seems clear that other companies have undergone layoffs, and I acknowledge that Xbox is developing new projects. However, I can’t help but feel that Microsoft isn’t directly responsible for these positive developments, but rather that they are happening in spite of Microsoft.

When you consider Microsoft’s other offerings such as Windows 11, Surface, and even its past — the unfulfilled promises, abrupt cancellations, and broken commitments — it strikes me as a corporation that is reluctant to take risks or provide products with enough time to succeed.

Microsoft lacks clear purpose or drive, and it seems unwilling to truly compete. It embodies the peak of late-stage capitalism, where failure is tolerated, and swiftly moving capital eliminates the requirement to fulfill consumer and societal needs.

It appears that Microsoft is more focused on following trends set by other pioneering companies, rather than nurturing and developing them. This strategy raises questions about how products like Xbox, Surface, or Windows 11 can expand without taking calculated risks, investing wisely, and fostering consumer trust. Given Microsoft’s substantial financial resources, one might expect a more proactive approach in the ever-changing tech landscape. However, it seems that Microsoft is content to go wherever the market trend takes it, which could potentially lead to stagnation or missed opportunities. A different strategy could yield better results.

The ruthless nature of these job cuts is a clear reflection of an unhealthy prioritization of money over people in some organizations. Yet, finding a solution isn’t simple. Microsoft, with its vast workforce, is no exception; every employee there deserves better. Many are underpaid for their dedication, and they all aspire to excel, innovate, and produce remarkable experiences and art. However, it seems that Microsoft’s corporate strategy often impedes rather than encourages these aspirations.

Microsoft, once known for its innovative spirit and groundbreaking technologies, appears to have lost its original purpose and identity, now resembling more of a financial institution rather than a technology company. It seems questionable if it ever truly earned the devotion often associated with “fans.

Regardless of the situation, Microsoft is currently earning significantly more than any other entity. Therefore, it seems inconsequential, and perhaps it always has been.

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2025-07-03 23:40