Microsoft's gaming division is facing challenges due to layoffs, industry consolidation issues, and controversial partnerships. Xbox is increasing service costs for its cloud gaming service, introducing a monthly cap for Game Pass subscribers starting in November, after which additional playtime must be purchased. This change follows a decline in Xbox revenue, which fell by .7 billion over the past year. Xbox also tested an ad-supported game streaming model to boost revenue. The effectiveness of the new pricing strategy is uncertain, especially after a previous price hike led to a loss of "millions" of Game Pass subscribers. Xbox plans to engage with its player base for feedback on these changes.