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**SPEAKER_1** (0:00)
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**Neil Freiman** (0:31)
Good Morning Brew Daily Show. I'm Neil Freiman.

**Toby Howell** (0:34)
And I'm Toby Howell.

**Neil Freiman** (0:35)
Today, Netflix has a problem. People aren't sticking around for the second season.

**Toby Howell** (0:40)
Then Xbox is on the struggle bus and is laying off thousands. It's Tuesday, July 7th. Let's ride.

**Neil Freiman** (0:57)
Oof, last night at the World Cup, the US. Men's National Team got shellacked by Belgium 4-1, an abrupt and frankly embarrassing end to what had been a promising tournament run. Tensions were high leading up to the game after America's star striker Fullerun Baligan was allowed to play after FIFA rescinded his one-match ban. But once the teams got on the pitch, it was all Belgium for 90 minutes and a familiar sinking feeling for USA fans. And so the World Cup rolls on without the Stars and Stripes, but Toby, I'm a free agent. Who should I root for? Who is my new team?

**Toby Howell** (1:31)
I can't believe these words are coming out of my mouth, but maybe England? They had such a gutsy performance against Mexico that they won me over. Morocco is also a very solid bandwagon to get on. They have not lost an official match in regular or extra time since late 2023 34 matches unbeaten. And finally, you got to love the Norwegians. Yes, they play England next round, but Holland is an absolute terror. I'm all in on the rowing after games. They also feel like the last true underdog left. So maybe take your attention to Norway.

**Neil Freiman** (2:05)
If you want to kind of ride the underdog, it is very frustrating because I think Norway and England are my top two and they're playing against each other. So I guess whoever wins that game, I'll ride or die with them. And now a word from our sponsor, Ultra Running, Toby, are you a shoe man?

**Toby Howell** (2:20)
I like to think I have a certain theatrical nature about me, yes.

**Neil Freiman** (2:23)
Shoe man, Toby, not show man, because today we're talking about Ultra. They actually make shoes shaped like feet.

**Toby Howell** (2:30)
Most running shoes are narrow out the toe, but Ultra has more room for your toes so they can spread out and your feet can stay in a natural position.

**Neil Freiman** (2:37)
The Ultra Fit is designed to give you room for your toes for comfort, balance and strength. So whether you run the road, sidewalk, trail or gym, Ultra has a shoe that can fit your foot and your lifestyle.

**Toby Howell** (2:47)
Use promo code MorningBrew10 for 10% off your first pair of Ultra running shoes at ultrarunning.com/morningbrew.
That's A-L-T-R-A, running.com/morningbrew.
Remember the red ring of death from your Xbox 360? It was a sign of your console's imminent demise. Right now, the entire Xbox division looks ringed in red. After Microsoft announced it was cutting up to 20% of its workforce. It is also selling or spitting off four to five game studios that it acquired within the past decade. The gaming division inside Microsoft had been spending money like a 13-year-old in GameStop for the first time. In 2023, it bought Activision Blizzard, home to Call of Duty and Candy Crush for $69 billion, the largest gaming acquisition ever. Microsoft followed that up by buying the studio behind Fallout and Skyrim for 8.1 billion. The idea was to assemble a great catalog of games so they could sell a bunch of Xboxes and a bunch of subscriptions to Game Pass, Microsoft's online game store. But instead of becoming the Netflix of gaming, some boss levels rolled around. Xbox CEO Asha Sharma said, Xbox ended up losing 64 cents for every $1 invested into its game studios. Our business today is not healthy, she wrote in a memo to employees. But perhaps the final boss was AI. Microsoft is spending roughly $190 billion this year on AI infrastructure, so some resources are being redirected away from slower growing businesses like gaming. Neil, Microsoft has been in the gaming business for a quarter century at this point, but right now might be its lowest moment ever.

**Neil Freiman** (4:24)
Xbox execs absolutely torched their own business in this memo. I mean, they went seems like they went a little above and beyond saying some hard truths about what's going on at Xbox. In this memo, they wrote, excluding Activision Blizzard King over the past five years, we have spent over $20 billion on ongoing investments in our content platform and hardware subsidy, but our annual revenue has declined nearly half a billion during that time. Going forward, this cannot continue. And previously, Microsoft's Satya Nadella, the CEO, said that Xbox gamers streaming their playing on YouTube were making more money off the games than Microsoft did. So they absolutely lit into their own business, but it seems like in a dire enough place where they needed to share these hard truths.