The Xbox system update released on August 12, 2026 includes a handful of useful features beyond the typical bug fixes and performance improvements. The update this time included features for Game Pass subscribers and those who play Xbox 360 games. It also follows some exciting new features released earlier this summer regarding power consumption, customization, and other settings.
Most importantly, Game Pass subscribers no longer have to wait for their games to update if they are also available via cloud streaming. Now, players have the option to launch the game in the cloud and set the game to update once they finish playing. The update also adds the ability to restore previously synced cloud saves in compatible games. So far, the only supported title is “Forza Horizon 6,” but Xbox says more titles will be added in future updates.
If you play Xbox 360 games, you’ll notice that these titles now have game hubs where you can check your achievements and other information. As for Xbox 360 achievements, the update adds detailed pop-ups and shows older Windows Phone games in your achievement history.
Finally, the update makes it easier to create wishlists and manage games. Users can now wish upcoming and released titles from their game cards, and the maximum has been extended to 1,000 games. The system also adds a badge that clearly indicates whether your games or add-ons come from subscriptions.
If your Xbox isn’t updating automatically, go to Settings > System > Updates to start it manually.
2026 was a tough year for Xbox
The new features in the August update mark a good, if minor, improvement in what has otherwise been a difficult year for Xbox fans. In February, the company announced the appointment of a new head of Microsoft Gaming, Asha Sharma, who replaced longtime Xbox leader Phil Spencer. Since then, the Xbox team has undergone massive restructuring efforts, including the announcement in July of its intention to lay off 20% of the staff, or approximately 3,200 employees. Half of the reductions occurred at the announcement, and the rest will occur during the company’s 2027 fiscal year.
Xbox also divested from several of its video game studios as part of the news. This is a stark departure from the company’s acquisition spree in the late 2010s and early 2020s, an effort that the company says failed to generate enough critical and commercial success.
Given the number of blows to the brand’s reputation recently, there are some obvious downsides to buying an Xbox in 2026. Still, for those who are already part of this ecosystem, updates like this improve the overall experience, even if only slightly.
These updates also help build hype for Microsoft’s next Xbox, announced earlier this year under the code name Project Helix. While the company hasn’t said much yet, there are rumors that it could include features like the ability to digitize physical games.
