Xbox CEO Asha Sharma Outlines Growth Strategy Following Major Restructuring

Washington DC, United States Jul 31, 2026 ALN: After a massive Xbox "reset" that laid off thousands of employees and spun off four studios, Xbox CEO Asha Sharma wants to get Xbox back to growth. In a memo obtained by The Verge, Sharma told staff by the end of fiscal year 2027 (which runs through next June), "we will return XBOX to player and revenue growth." Xbox will also "improve profits back in line with industry averages," Sharma said. "Every function and studio will own part of that outcome."

This strategic pivot comes in the wake of significant challenges that have plagued Xbox in recent years. The gaming industry has witnessed rapid changes in consumer preferences, technological advancements, and fierce competition from other gaming consoles and platforms. The restructuring appears to be a response to these challenges, as well as internal issues that have hindered Xbox's performance. Since taking over Xbox in February, Sharma has made sweeping changes to attempt to turn things around. Previously, she has cited challenges like a low accountability margin, increasing component costs for hardware, an "over extended" slate of studios, and platform infrastructure that’s "not built for the battle ahead." These factors have contributed to a perception that Xbox has been lagging behind competitors like Sony's PlayStation and Nintendo, which have consistently delivered blockbuster titles and innovative gaming experiences.

In addition to the major structural changes, Xbox made Gears of War: E-Day and Clockwork Revolution Xbox console exclusives and is planning to do more. The exclusivity of certain titles is a critical strategy in the gaming industry, as it can greatly influence consumer purchasing decisions and console loyalty. By ensuring that popular games are only available on Xbox, Sharma aims to enhance the appeal of the platform and attract new users. Furthermore, Sharma has set an ambitious and nearly impossible goal to make Xbox "one of the few companies that entertains more than a billion people each day." This lofty target reflects the company's desire to not only increase its player base but also to establish Xbox as a dominant force in the global entertainment landscape.

In Thursday’s memo, Sharma laid out four Xbox priorities for fiscal year 2027:

CORE: Strengthen our platform, led by console

CONTENT: Grow great games into global franchises

CREATION: Make Minecraft the world’s creator platform

CONNECTION: Extend the worlds that fans love

These priorities highlight a multifaceted approach to growth that encompasses not only the gaming hardware but also the content and ecosystem surrounding it. The focus on strengthening the core platform indicates a commitment to improving the Xbox console experience, which has been a cornerstone of the brand since its inception. By enhancing the console's capabilities and user experience, Xbox hopes to retain existing players while attracting new ones.

The emphasis on growing great games into global franchises is particularly noteworthy. The gaming industry has seen several franchises become cultural phenomena, with titles like Call of Duty, Fortnite, and Super Mario transcending gaming to become mainstream entertainment. By investing in the development and marketing of its franchises, Xbox aims to create long-lasting titles that can drive revenue and engagement over time. This strategy is critical in an era where gamers expect ongoing content updates and expansions, as well as cross-media adaptations such as films and television series.

Sharma's vision for Minecraft as the world’s creator platform is also significant. Minecraft has already established itself as a beloved game with a vast user-generated content ecosystem. By positioning Minecraft as a platform for creativity, Xbox can tap into the growing trend of user-generated content, which has become a key driver of engagement in modern gaming. This strategy not only enhances the game's longevity but also fosters a community of creators who can contribute to the platform's success.

The fourth priority, extending the worlds that fans love, speaks to the importance of community and connection in gaming. Multiplayer experiences and social interaction have become integral to gaming, and Xbox's focus on enhancing these aspects can lead to increased player retention and satisfaction.

Sharma shared some vague numbers about Xbox’s current playerbase. "XBOX is one of the largest stadiums in the world, bringing together more than 100 million people every day, more than 500 million each month, and nearly one billion each year," she wrote. These figures, while impressive, also highlight the scale of the challenge ahead. To achieve sustained growth, Xbox must not only retain its current players but also convert casual gamers into dedicated users. The ongoing competition in the gaming industry means that attracting new players is a continuous battle.

She also noted that the console "generates the majority of XBOX revenue and remains the foundation of our fandom" and that it is still Xbox’s "flagship experience." This acknowledgment of the console's importance underscores the need for Xbox to innovate and improve its hardware offerings to remain competitive. The rise of cloud gaming and mobile gaming has shifted the landscape, and Xbox's commitment to its console roots will need to be balanced with an openness to new technologies and gaming paradigms.

Xbox’s OS, Game Pass, Windows, and streaming "become our platform for new players and developers." Game Pass, in particular, has been a game-changer for Xbox, offering a subscription model that allows players access to a vast library of games for a monthly fee. This model has been successful in attracting new players and retaining existing ones, and it will likely play a central role in Xbox's growth strategy moving forward.

The company is also shifting its studio system from a decentralized model to one that’s "more focused around our strongest franchises and biggest new ideas," Sharma said — something that’s already become evident with changes like the big new Fallout push. This strategic realignment suggests that Xbox is looking to streamline its development processes and concentrate its resources on projects with the highest potential for success. By focusing on its strongest franchises, Xbox aims to leverage established brands to drive engagement and revenue.

Xbox will build "long-term plans" for its biggest franchises "across film, television, consumer products, sponsorship, live experiences, and form new partnerships globally, including China." This approach reflects a broader trend in the entertainment industry, where franchises are increasingly being developed across multiple media platforms to maximize their reach and profitability. By exploring opportunities in film and television, Xbox can create additional revenue streams and enhance brand visibility.

Three Xbox franchises "already generate more than $1 billion annually," though Sharma doesn’t specify which those are. This figure underscores the financial potential of successful franchises and highlights the importance of nurturing and expanding these properties. As Xbox seeks to grow its portfolio of franchises, it will need to identify and cultivate new intellectual properties that can achieve similar success.

To grow its share in casual games, Xbox plans to lean on Candy Crush-maker King as well as Microsoft Casual Games, Sharma said. This strategy points to the growing significance of casual gaming in the overall market. Casual games have a broad appeal and can attract a diverse audience, making them an essential component of Xbox's growth strategy. By collaborating with established developers like King, Xbox can tap into existing audiences and expertise in the casual gaming space.

And Xbox is planning to invest in Minecraft "more than ever before." This commitment to one of its most successful franchises signals a recognition of the game's enduring popularity and potential for growth. Investing in Minecraft not only reinforces its position as a key title for Xbox but also demonstrates a commitment to fostering a vibrant community of players and creators.

In conclusion, Asha Sharma's ambitious growth strategy for Xbox reflects a comprehensive understanding of the challenges and opportunities facing the gaming industry. By focusing on core strengths, expanding successful franchises, and embracing new technologies and partnerships, Xbox aims to navigate the competitive landscape and achieve sustainable growth. The coming years will be critical for Xbox as it works to implement these strategies and regain its position as a leader in the gaming market.