According to TechRadar, Microsoft’s 2025 was shaky, marked by a failed push to make “every Windows 11 PC an AI PC” that sparked a user rebellion. Windows 10 support officially ended on October 14, 2025, but a free Extended Security Updates option via OneDrive slowed migration to Windows 11 to a trickle. In gaming, Xbox Game Pass Ultimate saw a massive price hike to $29.99 per month in September, causing a subscriber exodus so large it crashed Microsoft’s systems, even as annual Game Pass revenue hit nearly $5 billion. Console sales were disastrous, with an analyst reporting a 70% year-on-year drop for Xbox. The company also cut 9,000 jobs in its Gaming division in July.
The AI Push That Pushed Back
Here’s the thing about shoving AI into everything: people notice. And in 2025, Windows users noticed enough to get seriously angry. Microsoft’s vision of an “agentic AI platform” felt less like innovation and more like an intrusion, especially when core parts of the OS were still buggy. Execs firing back at skeptics just made it worse. It’s one thing to add a genuinely useful feature like supercharged search; it’s another to make AI the entire personality of your operating system while basic quality control seems like an afterthought. When you see glitches like a “flashbang” when opening folders, you have to ask: is this the stable foundation we want for autonomous AI agents rummaging through our files? The privacy and security concerns are very real, and Microsoft’s responses haven’t been comforting. They’ve created a trust deficit, and that’s hard to undo.
A Brutal Year for Xbox and Game Pass
Man, where to even start? The gaming division had a nightmare year. The Game Pass price hike was a classic case of misreading the room. Sure, revenue hit $5 billion, but at what cost? Crashing your own cancellation system because so many people are leaving is a powerful signal. Then there’s the hardware. A 70% drop in console sales isn’t just bad; it’s catastrophic. Couple that with a high-priced, niche device like the ROG Xbox Ally X, and it feels like the strategy is all over the place. And let’s not forget the 9,000 layoffs. It paints a picture of a division under intense pressure to hit profit margins, even if it means alienating the core audience. Now, with Valve’s SteamOS making real strides in compatibility and living room convenience, Microsoft’s gaming woes on Windows 11 aren’t just an annoyance—they’re an open door for competitors.
The Upgrade That Wasn’t
So Windows 10 support ended, but basically nothing happened. That free ESU loophole was a smart consumer-friendly move, but it completely undermined Microsoft’s own goal of migrating people to Windows 11. Why upgrade to a buggier, AI-cluttered OS when your old one gets another year of security for free? It also highlights a deeper issue: for a lot of people, especially on older hardware, Windows 11 just isn’t compelling. The 25H2 update was a snooze, and the real work—fixing foundational bugs and performance—keeps getting sidelined for flashy AI demos. The real interesting footnote is the mention of Linux distros seeing an uptick. It’s probably not a mass exodus, but when even a trickle of users jumps ship because of your OS decisions, you should probably pay attention.
Surface Stagnation and The Road Ahead
After the home run of the Arm-based Surface Pro 11 in 2024, the Surface Pro 12 in 2025 felt like a bunt. Trading down specs to hit a lower price point is a strategy, but it’s not an inspiring one. It signals a division playing it safe, which is ironic given the reckless AI push elsewhere in the company. Looking ahead to 2026, Microsoft has some stark choices to make. They need to rebalance Windows development toward stability and user trust over AI hype. They need a coherent, consumer-friendly strategy for gaming that doesn’t rely on constant price hikes. And they need to figure out how to make Windows 11 actually desirable, not just the only option. If they don’t, that trickle away from their platforms could slowly start to widen.
