2026.28: XBOX On the Rocks

Welcome back to This Week in Stratechery! As a reminder, each week, every Friday, we’re sending out this overview of content in the Stratechery bundle; highlighted links are free for everyone. Additionally, you have complete control over what we send to you. If you don’t want to receive This Week in Stratechery emails (there is no podcast), please uncheck the box in your delivery settings. On that note, here were a few of our favorites this week. - A Word from Mark Zuckerberg*. I was delighted to see Ben insert himself into the CEO chair at Meta on Tuesday and write a script for Mark Zuckerberg as he tells the story of Meta and its AI investments in 2026. That article traces past Meta mistakes as well as those of investors who doubted the company, all to frame current investments in AI and the massive opportunities that remain central to the Meta’s future. A combination of history, analysis of the future, and fun, it’s a perfect summer read. As for a summer listen, we doubled back on all of it, plus Meta’s Muse-Spark release, for this week’s episode of Sharp Tech. — Andrew Sharp - Pulling the Plug on XBOX? It’s been years since there was good news coming out of the XBOX division at Microsoft and that trend continued this week, as XBOX CEO Asha Sharma announced plans to eliminate 3,200 jobs, or around 20% of its staff over the next 12 months. Wednesday’s Daily Update explores how Microsoft arrived at this point and why, in particular, the Game Pass initiative that was the last great hope for XBOX has been a failure. I’m not a gamer, but Ben’s rendering of the XBOX story — and the Game Pass story — is a great case study of both internet economics and management mistakes (and analyst ones!). — AS - Toilet Talk. Look, I get that’s a little weird, but if there is one brand of household appliances that I cannot imagine living without, it is in the bathroom. Specifically, I absolutely love my Toto toilet, and was delighted that Jon made a video about the company on Asianometry. Here’s the twist: the reason why Toto is a subject of interest isn’t their toilets, but rather the fact the Japanese company also plays a critical role in the AI supply chain. — Ben Thompson Stratechery Articles and Updates - A Script for Mark Zuckerberg — A script for what Mark Zuckerberg should say on Meta’s next earnings call. - XBOX Cuts; Bundling and the Internet Solvent; Transaction, Coordination, and Sunk Costs — Microsoft’s Xbox division is conducting big layoffs, as the company deals with abject failure of its Game Pass strategy. - Muse Image, Grok 4.5, Alex Karp on CNBC — The battle for verifiable data is increasingly defining the AI race, from Meta to Grok to the frontier labs. Sharp Text by Andrew Sharp - Online Insanity and Its Counterpoint — What we can and can’t achieve in response to paranoia and extremism online. Dithering with Ben Thompson and Daring Fireball’s John Gruber Asianometry with Jon Yu Sharp China with Andrew Sharp and Sinocism’s Bill Bishop Greatest of All Talk Sharp Tech with Andrew Sharp and Ben Thompson This week’s Asianometry video is on TOTO: From Toilets to E-Chucks.