Xbox CEO Asha Sharma has set an ambitious target for Microsoft's gaming division: to achieve greater profitability than competitors Sony and Nintendo by fiscal year 2030. Sharma detailed a multi-faceted plan in a CNBC interview and an internal Xbox memo, emphasizing long-term franchise development across various media and strategic global partnerships.
The strategy includes significant investment in existing major franchises, such as Minecraft, with a focus on expanding revenue through film, television, consumer products, sponsorships, and live experiences. New global partnerships, including in China, are also part of the roadmap. Sharma anticipates an acceleration in revenue growth in the fiscal years 2028 and 2029, aiming for sustained double-digit growth in players and engagement, alongside industry-leading profit margins by FY2030.
Despite these long-term goals, Xbox faces immediate challenges. Data from Circana indicates a 27% year-over-year decline in US Xbox Series hardware sales in September 2026, marking a new September low. Sharma acknowledged a decline in revenue for the most recent financial quarter, attributing console sales constraints partly to supply issues, though specifics were not provided. The price of Xbox consoles has also increased since its November 2020 launch.
This period follows a significant restructuring under Sharma's leadership, which has included over 1,600 job eliminations and the closure of several studios. The company's current quarterly revenue has seen a 10% decline, a stark contrast to the operating margins reported by competitors; Sony achieved a 9.9% operating margin from its game and network services in its latest financial year, while Nintendo reported nearly 16%.
Xbox's evolving strategy extends beyond traditional gaming with the recent unveiling of the XP division, dedicated to film, television, and live events. This initiative aligns with recent multimedia project announcements, including a third season of the Fallout TV series, a Call of Duty film, a Diablo animated series, and a Minecraft theme park scheduled to open in 2027. These efforts signal a broader push to leverage intellectual property across a wider entertainment landscape in pursuit of profitability.