Xbox CEO lays out priorities in memo after major ‘reset’
What's happening
Xbox CEO Asha Sharma is laying out new priorities for the gaming division following a major organizational reset that included significant layoffs and studio divestitures. The memo to staff outlines goals to return Xbox to growth by the end of fiscal year 2027.
Who's involved
Asha Sharma, who leads Xbox at Microsoft, is charting a new direction for one of the tech giant's most competitive divisions. Microsoft is one of the world's largest gaming companies, competing with Sony's PlayStation and Nintendo in the console market.
Why it matters
The restructuring signals Microsoft's acknowledgment that Xbox needed a strategic overhaul to remain competitive and profitable in a challenging gaming market. Successfully executing Sharma's vision is critical for Xbox's long-term relevance and for Microsoft's broader entertainment and gaming ambitions worth billions annually.
More context
The Xbox reset included thousands of employee layoffs and the spinoff of four studios, marking one of the gaming industry's most significant recent reorganizations. This comes as Xbox faces intense competition from PlayStation and growing pressure in the subscription gaming market, where Game Pass is central to Microsoft's strategy. The company has been investing heavily in acquiring studios and expanding its gaming portfolio, but recent results have prompted this strategic recalibration. Sharma's memo represents management's commitment to a leaner, more focused approach to game development and Xbox's overall business model going forward.