● Covered by 2 sources · 2 reportsMedium impact2 neutral
Xbox CEO Asha Sharma Outlines Strategy for Growth and Profitability by 2027
Key points
- Xbox aims for player and revenue growth by end of fiscal year 2027.
- Profit margins are targeted to match industry averages by 2027.
- Strategy follows layoffs, studio divestitures, and leadership changes.
- Xbox console exclusives like Gears of War: E-Day are emphasized.
- Challenges include increasing component costs and an overextended studio slate.
New Direction for Xbox
Xbox CEO Asha Sharma has outlined a new strategy to drive growth and improve profitability for the gaming unit. In a memo to staff, Sharma stated that Xbox aims to return to player and revenue growth by the end of fiscal year 2027. The goal is also to bring profit margins in line with industry averages by the same timeframe.
Context of Recent Changes
This strategic shift follows a period of significant changes at Xbox, including a "massive reset" that involved thousands of employee layoffs and the spin-off of four development studios. Sharma, who took over as Xbox CEO in February, has also appointed new leaders and adjusted Game Pass subscription prices. The company recently reported a 10% quarterly revenue decline, its most sluggish performance since 2022.
Sharma has previously identified challenges such as a low accountability margin, increasing component costs for hardware, an "over extended" slate of studios, and platform infrastructure that was "not built for the battle ahead."
Focus on Exclusives and Profitability
A key part of the strategy involves emphasizing exclusive titles for the Xbox console. Examples include making Gears of War: E-Day and Clockwork Revolution Xbox console exclusives, with plans for more such titles. Sharma and Matt Booty, Xbox's chief content officer, previously anticipated a 3% internal margin.
The memo stressed a forward-looking approach, with Sharma stating, "We will not live on past successes or be trapped by past failures. We will learn from both and put our energy into creating what players will love for decades."
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
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How outlets covered it
Microsoft's new Xbox chief, Asha Sharma, has detailed a strategy to increase the gaming unit's profit margin to match rivals by 2025 and exceed them by 2030. This plan follows a 10% quarterly revenue decline for Xbox and includes leadership changes, Game Pass price adjustments, and a focus on exclusive titles and casual games.
Xbox CEO Asha Sharma detailed a strategy to return Xbox to player and revenue growth and improve profits to industry averages by the end of fiscal year 2027. This plan follows recent layoffs and studio spin-offs, aiming to address challenges like increasing component costs and an overextended studio slate. The strategy focuses on strengthening the console platform, growing game franchises, making Minecraft a creator platform, and extending fan engagement.