To be honest, I doubt Game Pass was very profitable for them in the first place. The deal really was too good to be true. It’s more like Game Pass was a loss leader, and they’re trying to stop the bleeding. But as it turns out, the model just isn’t sustainable, and it’s cheaper to go full PC as a gamer.
A cheap gaming pc and steam offer more value than an xbox with gamepass.
Their gaming handling has been atrocious. Halo, their flagship franchise and biggest system seller, hasn’t been good, let alone relevant, in decades. They bought many studios, but there are still no exclusives in sight. Imagine buying all those IPs and studios, outspending everyone, and still being dead last.