XBOX CEO Asha Sharma has outlined a multiyear roadmap intended to return Microsoft’s struggling gaming division to player and revenue growth.
The plan comes shortly after Microsoft reported another disappointing quarter for XBOX. According to an earnings report released one day before Sharma’s statement, total XBOX revenue declined 10% year over year. Content and services revenue also fell 10%, while hardware revenue dropped 13%.
Those quarterly results followed a 7% decline in gaming revenue across the full fiscal year. Although more than 200 million new players came to Xbox and its games during that period, the division failed to translate its expanding audience into comparable financial growth.
An image from Halo: Campaign Evolved – Microsoft, XBOX Game Studios, Halo Studios
In an internal memo obtained by The Verge, Sharma promised to reverse that trend by the end of Microsoft’s 2027 fiscal year next June.
“We will return XBOX to player and revenue growth,” Sharma wrote. She added that the division would bring its profit margins back in line with industry averages, with “every function and studio” responsible for contributing to that outcome.
XBOX Attempts to Recover From a Failed Strategy
The roadmap follows what Sharma previously called “the most significant restructure in XBOX history.”
In early July, she announced plans to eliminate approximately 3,200 positions by the end of fiscal 2027. Compulsion Games and Double Fine Productions are becoming independent, while Ninja Theory and Undead Labs are transitioning to new owners.
Sharma acknowledged that XBOX’s previous strategy—built around Game Pass, multiplatform publishing, hardware subsidies, and an expanded content portfolio—failed to create a healthy business.
“Our business today is not healthy,” she wrote at the time. “We are operating at margins that are 3–10x lower than comparable platform and publishing businesses.”
The Game Pass logo – Microsoft, XBOX
She also revealed that some portions of XBOX had accumulated as many as 14 management layers. The restructuring will reduce that number to no more than five, with three considered ideal.
Against that backdrop, Sharma organized the new growth plan around four priorities: Core, Content, Creation, and Connection.
XBOX Returns Its Attention to Consoles
“Core” calls for Microsoft to strengthen its gaming platform, led by the XBOX console.
According to Sharma, consoles generate most of the division’s revenue and remain “the foundation of our fandom.” She also called the console XBOX’s “flagship experience,” signaling a notable change after years spent emphasizing Game Pass, cloud gaming, and multiplatform releases.
The “Content” priority focuses on transforming successful games into global franchises. XBOX is shifting away from a decentralized studio structure to one organized around its strongest existing properties and most promising new ideas.
Xbox Consoles – Microsoft
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Under “Creation,” Microsoft intends to make Minecraft “the world’s creator platform.” Sharma said XBOX will invest more heavily in the property than ever before, potentially positioning it as a broader user-generated ecosystem comparable to Roblox.
Connection” involves extending XBOX franchises beyond games into broader culture. Microsoft will develop long-term plans across film, television, consumer products. Microsoft will develop long-term plans across film, television, consumer products, sponsorships, and live experiences. It will also pursue international partnerships, including opportunities in China.
XBOX has already found success with A Minecraft Movie and Amazon’s Fallout adaptation. Additional projects include a Call of Duty movie from writer Taylor Sheridan and director Peter Berg.
XBOX Sets a Three-Year Timetable for Growth
Sharma expects XBOX to return to player and revenue growth by June 2027. During fiscal years 2028 and 2029, the company’s investments must begin producing greater player value and accelerating revenue.
By fiscal year 2030, she wants the division to achieve sustained double-digit growth in players and engagement while delivering industry-leading profit margins.
The roadmap gives XBOX measurable targets following years of strategic uncertainty. However, its success depends on whether Microsoft can finally convert its enormous audience into a healthy business after acknowledging that Game Pass, multiplatform publishing, and aggressive expansion failed to deliver the expected returns.
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