Xbox CEO Asha Sharma has stated that the division "will not survive" without new intellectual property (IP), a declaration made during an internal company town hall. This statement comes at a time when Xbox is undergoing significant restructuring, which has involved substantial job cuts and the divestment from several studios. These very studios were responsible for creating some of Xbox's more recent original game series.
Sharma reportedly communicated this message in a recent Xbox town hall, with details emerging through reports. She indicated a strategic focus on strengthening existing franchises, aiming to transform successful games into major global properties. This includes relocating the development of the Halo series to Activision, the publisher of Call of Duty, and moving Obsidian Entertainment under Bethesda to focus on a new Fallout game.
Despite the emphasis on established franchises, Sharma also stressed the importance of innovation. "I would also like to see us continue to create enduring new IP," she was quoted as saying. "We will not survive if we only revive the past. We have to find new ways, and courage, to have invention on new IP, that reaches new sets of audiences."
However, this emphasis on new IP appears contradictory to recent decisions. Microsoft has recently ended its funding for studios such as Double Fine, Ninja Theory, Compulsion Games, and Undead Labs. These studios were instrumental in developing original titles for Xbox. Double Fine was behind games like Kiln and Keeper, Ninja Theory created the Hellblade series, Undead Labs developed State of Decay, and Compulsion Games released South of Midnight. Arkane Studios, currently in negotiations regarding its future with Microsoft, contributed Deathloop and is working on Marvel's Blade.
The restructuring also raises concerns for the studios that remain. Shifting studios like Obsidian under larger umbrellas like Bethesda could potentially limit their ability to pursue unique projects, directing them instead toward established sequel development for franchises like Fallout and Elder Scrolls. Reports also suggest that id Software has been significantly reduced in size, potentially impacting future installments of the Doom series.
Sharma's pronouncements on the necessity of new IP, while accurate in principle for long-term business health, are viewed by some as hypocritical given the company's recent actions in dismantling studios that were actively generating such content. The sentiment from Xbox leadership suggests a desire for original games that can achieve widespread success, but the company's immediate strategic moves appear to directly undermine the creative teams capable of fulfilling that vision.