2025 proved to be a challenging year for Microsoft, marked by a series of hurdles that tested the software giant’s resilience. One of the most significant issues was the tepid migration to Windows 11, which followed the official end of Windows 10 in October. Despite this transition, many users opted to remain on the older operating system, thanks in part to the introduction of Extended Security Updates (ESU) for consumers at no cost, alongside a paid option. This decision allowed a considerable number of users to delay their upgrade, resulting in a gradual rather than a swift shift to Windows 11. The lingering question remains: how many will ultimately make the leap once the extended support concludes in October 2026?
Windows 10 support ran out – but there was no rush to upgrade to Windows 11
As the curtain fell on Windows 10, the final official update was rolled out, yet the anticipated rush to Windows 11 did not materialize. The option for extended updates, particularly the free route through OneDrive, kept many users anchored to the familiar interface of Windows 10. This trend was further complicated by the fact that numerous older PCs did not meet the stringent system requirements of Windows 11, leading to a slower-than-expected migration. Interestingly, some Linux distributions reported an uptick in users switching from Windows, hinting at a potential shift in the desktop operating system landscape.
Microsoft’s big push for more AI in Windows 11 – and how it backfired
In 2025, Microsoft intensified its focus on integrating AI into Windows 11, aiming to transform every PC into an AI-powered device. However, this ambitious initiative faced significant backlash from users who felt overwhelmed by the emphasis on AI features that seemed unnecessary. Critics voiced their frustrations, calling for a return to addressing the existing bugs and performance issues plaguing the operating system. Despite some useful AI enhancements, such as improved searching capabilities and potential applications in Settings, the overarching sentiment was one of skepticism and concern regarding privacy and security.
Elsewhere Windows 11 plodded along and still struggled with bugs
Beyond the AI initiatives, Windows 11 continued to grapple with its quality assurance processes. The anticipated annual upgrade, 25H2, brought only minor improvements, including a new PC recovery option and a redesigned Start menu. However, the persistent bugs and glitches remained a significant concern, with users encountering odd issues that raised questions about Microsoft’s reliability. The gaming experience, in particular, suffered from various technical problems, leading to frustration among users.
Gaming woes with Windows 11 as Microsoft treads a difficult path
Gamers faced a particularly tough year, as bugs within Windows 11 disrupted their experience. This came at a time when competition from platforms like SteamOS was intensifying. Valve’s advancements in gaming compatibility and the announcement of a new Steam Machine posed a credible threat to Microsoft’s dominance in the gaming space. While Microsoft acknowledged its shortcomings and promised improvements, skepticism lingered, especially as the company struggled to deliver a seamless gaming experience on handheld devices.
Xbox Game Pass price hike misery
On the gaming front, Microsoft also faced backlash due to a significant price increase for Xbox Game Pass, which saw the Ultimate tier rise to .99 per month. This move sparked outrage among subscribers, leading to a wave of cancellations that overwhelmed Microsoft’s systems. Although the company justified the hike by highlighting added value, many gamers felt the increase was unwarranted. Despite potential subscriber losses, revenue from Game Pass reached nearly billion annually, indicating that those who remained were paying considerably more.
Xbox console sales crash and burn
As the year drew to a close, Microsoft faced another setback with a staggering 70% drop in Xbox console sales year-on-year. While competitors like Sony also experienced declines, their losses were less severe. This decline was exacerbated by price hikes on gaming hardware, further complicating Microsoft’s position in the console wars.
Surface hardware didn’t have quite the same impact
In the realm of hardware, the Surface division did not replicate the previous year’s successes. The Surface Pro 12, while not a poor device, failed to generate the excitement of its predecessor, and the Surface Laptop 13-inch struggled to compete with Apple’s offerings. Overall, while the Surface lineup performed adequately, it did not reach the heights achieved in 2024.
