Recent initiatives by Xbox CEO Asha Sharma have not yielded positive results in terms of sales or player engagement in the United States, according to Circana analyst Mat Piscatella. He observed that the disc-to-digital program has not altered the sales trends for new physical software, and the exclusivity of Gears of War: E-Day on Xbox consoles has not stimulated hardware sales.
Piscatella described Gears of War: E-Day as a visually impressive title, but noted that making it an Xbox exclusive may have inadvertently limited its potential to boost the platform overall. While evidence suggests the game was initially planned for PlayStation 5, its exclusivity has not yet translated into significant gains for Xbox. Some industry insiders suggest this move was intended to garner favor among core fans rather than drive broad adoption.
Furthermore, Piscatella pointed to the decision to remove new Call of Duty titles from Game Pass as detrimental. He indicated that data shows a considerable drop in engagement for the franchise after Modern Warfare 4 was made unavailable on the subscription service, with no apparent benefit to Xbox. "It’s really hard to find any signs of positivity or hope on that platform right now," Piscatella stated, suggesting that current efforts primarily serve to appeal to a vocal segment of the fanbase rather than deliver tangible results.
Sharma, who assumed leadership in February, is taking a long-term approach to revitalize Xbox. Her strategy involves a focus on driving studio growth for both players and revenue by the end of the fiscal year in June 2027. Beyond game development, Sharma is expanding Xbox's reach into film, television, consumer products, sponsorships, and live experiences through a newly established unit called XP, with additional efforts targeting the Chinese market.
Sharma has also set ambitious financial goals, aiming for Xbox's profit margins to align with those of rivals Sony and Nintendo by 2027, and to surpass them by mid-2030. Currently, Xbox operates with an internal profit margin of approximately 3%, significantly lower than PlayStation's 9.9% and Nintendo's 16%. This means Xbox retains only $3 for every $100 in revenue, highlighting the challenge of improving profitability.