Game Over: This Retail Giant Pulls Xbox from Its Stores
A major American retailer has slammed the door on Microsoft, pulling Xbox consoles from its shelves for good. A business decision that may well mark the end of an already troubled generation for the Redmond-based brand.
Retail giant Costco has just dealt a serious blow to Microsoft by announcing the complete withdrawal of Xbox consoles from its stores. This commercial break, confirmed by a company spokesperson, perfectly illustrates the growing struggles of Microsoft’s gaming division amid rising costs and fierce competition from Sony.
Image credit: Microsoft
An Officially Confirmed Withdrawal
The news was first revealed by Destin Legarie, former IGN journalist, who contacted Costco directly about the removal of Xbox consoles and accessories from the retailer’s website. The response was crystal clear: “We don’t have any plans going forward to carry an Xbox console”. The spokesperson called it strictly a “business decision,” without giving further details on the reasoning behind it.
Just called Costco about Xbox stock. I was told that they will no longer be carrying Xbox consoles. “We don’t have any plans going forward to carry an Xbox console.” Saying. It was a business decision.
They did say they have some great deals on Switch & PlayStation, though. — Destin (@DestinLegarie) September 25, 2025
Even more telling, Costco emphasized that it will continue offering excellent deals on Nintendo Switch and PlayStation consoles, making it clear that the withdrawal specifically targets Microsoft products. This selectivity highlights that the move is aimed at Xbox and not the console market as a whole.
A Tense Economic Context
This split comes at a particularly unfavorable economic moment for Microsoft. In the United States, the Xbox Series X has practically become a luxury item, as Trump administration trade policies have significantly increased the import costs of consoles manufactured in China. Unlike traditional computers and smartphones, which received exemptions, gaming consoles have been hit hard by these extra tariffs.
As a result, Microsoft was forced to raise prices for both the Xbox Series X and Xbox Series S twice on the U.S. market.
- First increase: initial price hike to offset customs tariffs
- Second increase: additional adjustment due to escalating import costs
This inflationary spiral dangerously eats into already fragile hardware margins and complicates the aggressive pricing strategies console makers typically rely on.
On top of this, Microsoft has been struggling with structural challenges since the launch of its ninth-generation consoles. Despite impressive technical performance, the Xbox Series X and Series S have failed to claw back market share from Sony’s dominant PlayStation 5.
Xbox’s Future Lies in Games and Portables
Paradoxically, Microsoft is offsetting its hardware weakness with an ambitious ecosystem strategy. The Xbox Game Pass continues to attract massive audiences, while the gaming division now generates more revenue than Windows itself. The “Everything is an Xbox” approach is paying off, with Microsoft exclusives making their way to PlayStation and PC, maximizing reach.
Third-party developers are also showing renewed interest in the Xbox platform, as seen with Square Enix bringing back Final Fantasy XVI, and Sony publishing Helldivers 2 on Microsoft consoles.
Finally, the future of the brand seems to be moving away from the classic console model toward a philosophy closer to the PC world. The upcoming Xbox Ally, a hybrid between handheld and home console set to launch on October 16, 2025, is the perfect example. With this strategy, Microsoft aims to build an open, flexible, and service-driven ecosystem. Early signs are promising: the ROG Xbox Ally X sold out in just seven hours after preorders opened, proof that the formula may appeal to gamers seeking fresh experiences.
