Xbox CEO Asha Sharma has stated that the division is now experiencing growth after reaching an "all time low," according to reports from an internal town hall meeting. Sharma addressed staff following a series of significant layoffs and studio closures as part of a business "reset."
Sharma indicated that decisions made were the "right decisions" and pointed to a positive trajectory for the business. She also highlighted strong starts for several game titles, including Gears of War: E-Day, Minecraft Dungeons 2, and World of Warcraft: Forever. This suggests a renewed focus on key franchises and new content as part of the recovery strategy.
The future of Xbox hardware was also a topic, with Sharma confirming that the company's next-generation platform, codenamed "Project Helix," will be a "family of devices." This approach acknowledges that a single console may not cater to all player needs, with plans for both traditional console experiences and portable options. Microsoft intends to manufacture some of these devices directly, while also seeking partnerships for others. Sharma expressed excitement about the development of the operating system for these future products.
The company is navigating a challenging market influenced by global macroeconomic factors, including increased demand for memory and components driven by AI development, and rising oil prices. The Federal Reserve's recent interest rate hikes in the US have also impacted borrowing costs across various market sectors, including gaming.
These strategic adjustments at Xbox have involved substantial workforce reductions, with reports of approximately 1,600 layoffs in July and close to 300 more in September, with further job losses anticipated. Additionally, Microsoft has closed or divested several studios, including Double Fine and Ninja Theory. Despite speculation that these moves were intended to make Xbox more attractive to a potential buyer, Sharma has insisted that the division is not for sale. This assertion contrasts with some external observations regarding the company's strategic flexibility.
Furthermore, a significant restructuring of the Xbox business has occurred. Activision has taken over the development of the Halo series, and Bethesda's operational scope has been expanded to include Obsidian Entertainment. These changes reflect a broad strategic realignment across Microsoft's gaming portfolio.