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Ex-Xbox VP: Ditching Consoles & Exclusives is Smart for Microsoft

Last Updated: November 20, 2025

Mike Ybarra discussing the future of Xbox and gaming.

In a landscape of shifting strategies and industry-wide discussions, a former high-ranking Xbox executive has weighed in on the company's future, suggesting that a departure from console hardware and exclusive games could ultimately be a beneficial business decision for Microsoft. Mike Ybarra, who served as Corporate Vice President at Xbox for nearly two decades before becoming President of Blizzard Entertainment, shared his perspective on the complex challenges facing modern platform holders. He departed from Blizzard Entertainment in January 2024.

The comments arrive during a period where Xbox's long-term plans continue to be a subject of industry interest. While Xbox leadership, including Phil Spencer, has publicly reaffirmed their commitment to producing console hardware, Ybarra's analysis suggests that the path of a service- and software-focused publisher might be a logical one. He proposed that in today's environment, a move to get "out of hardware and exclusive games" could be a positive evolution for the brand.

A New Strategy for a New Era

The core of Ybarra's argument centers on the cost and competition inherent in the traditional console business. Manufacturing, marketing, and developing a dedicated hardware platform is a monumental undertaking. By shifting focus entirely to software and services, namely its flagship Game Pass subscription, Xbox could massively expand its potential audience beyond the confines of its own hardware.

This strategy is already in motion. Microsoft has brought several of its first-party titles, including Sea of Thieves, Grounded, Pentiment, and Hi-Fi Rush, to competing platforms like PlayStation and Nintendo Switch. These releases have generated significant discussion and, in some cases, commercial success, indicating a potential shift in Microsoft's approach to exclusivity. For example, Sea of Thieves topped sales charts on PlayStation 5 in multiple regions upon release. Ybarra’s perspective posits that this is not just a temporary tactic but a glimpse into a viable and potentially more profitable future. In this model, Xbox would operate more like a multi-platform publisher, bringing its games and services to players wherever they choose to play.

Ybarra explained that for players who remain dedicated to console gaming, they would still have excellent hardware choices from other major players in the market. The difference would be that "Xbox" games would be available on those platforms, ensuring that fans of franchises like Halo, Forza, and Gears of War would not be left behind. Recent releases have proven the viability of this approach, with Xbox titles finding new audiences on competing platforms.

The Handheld PC Market and the OS Question

Ybarra provided an example to illustrate his point: the ASUS ROG Ally X handheld gaming PC. He addressed the question of why Microsoft wouldn't create a dedicated, streamlined Xbox operating system for devices like this. His reasoning aligns with a platform-agnostic future.

He stated that it "makes sense" for Microsoft not to pursue a dedicated Xbox OS for third-party handhelds. The key reasons for this include:

  • Open Ecosystem: Forcing an Xbox-only OS onto a device like the ROG Ally X would limit its appeal. A major strength of PC handhelds is their ability to access multiple game launchers and stores.
  • User Freedom: Players on these devices expect the full functionality of Windows, allowing them to access their entire library of games from various services, not just the Xbox ecosystem.
  • Business Focus: Developing and supporting a separate OS for third-party hardware would be a significant resource drain. Instead, focusing on improving the Xbox app and Game Pass experience within the existing Windows environment is a more efficient and user-friendly approach.

By keeping Windows as the underlying operating system, Microsoft empowers partners like ASUS to sell a more versatile device while ensuring its own Game Pass service remains a premier application within that open ecosystem. The ROG Ally X, launched in June 2024, exemplifies this strategy, offering access to a wide range of PC games, including those available through Game Pass.

What a Software-First Xbox Could Look Like

While Microsoft's current official stance is a continued commitment to next-generation hardware, Ybarra's comments paint a picture of an alternative long-term strategy. If Xbox were to fully embrace a software-and-service model, its business could transform in several key ways:

  • Universal Game Pass: The primary goal would be to make Game Pass an essential subscription on every screen, from consoles and PCs to handhelds, smart TVs, and mobile devices. Xbox has continued to expand Game Pass availability, including cloud gaming options that allow play on a variety of devices.
  • Multi-Platform Studios: First-party development teams like 343 Industries, The Coalition, Bethesda, and Obsidian Entertainment would become true multi-platform studios, developing titles for all available hardware. This transition is underway, with several studios already releasing games on multiple platforms.
  • Reduced Overhead: The immense costs associated with console research, development, manufacturing, and supply chain logistics would be eliminated.
  • Focus on Content: Resources previously allocated to hardware could be funneled directly into game development and service infrastructure, potentially leading to more games and a more robust Game Pass library. Microsoft's acquisition of Activision Blizzard further reinforces this focus on content creation.

This vision reimagines Xbox not as a box you put under your television, but as a universal gaming service you can access anywhere. While this would be a significant departure from the "console wars," it reflects a broader trend in entertainment toward platform-agnostic subscription services. For now, Xbox continues to develop its next console, reportedly slated for a 2026 release. However, the insights from a seasoned veteran like Ybarra offer a compelling look at a very different, and potentially very successful, future.

Frequently Asked Questions

Who is Mike Ybarra?

Mike Ybarra is a respected veteran of the video game industry. He spent nearly 20 years at Microsoft, rising to the position of Corporate Vice President of Xbox, where he was heavily involved with Xbox Live, Xbox Game Pass, and Mixer. He later served as the President of Blizzard Entertainment until early 2024.

Is Xbox officially stopping console production?

No. Xbox leadership, including Phil Spencer, has publicly stated that Microsoft is not exiting the hardware business. They have confirmed that work is already underway on the next generation of Xbox consoles. Mike Ybarra's comments represent his personal, expert opinion on a potential long-term business strategy.

What is the ASUS ROG Ally X?

The ASUS ROG Ally X is a high-performance handheld gaming device that runs on the Windows operating system. It is designed to play PC games from various digital storefronts, making it a powerful and versatile portable gaming computer. It launched in June 2024.

Why would Xbox consider stopping exclusive games?

The business argument is based on audience expansion. By releasing games on all platforms, Microsoft could potentially sell its software to hundreds of millions of additional players who do not own an Xbox console. This could dramatically increase revenue from game sales and drive more subscriptions to Game Pass if the service is also offered on those platforms. The recent releases of Xbox titles on PlayStation and Nintendo Switch serve as a real-world test of this hypothesis.