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Xbox CEO lays out priorities in memo after major ‘reset’
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Xbox CEO Asha Sharma has outlined a strategic roadmap to return the gaming division to growth following a major restructuring that included thousands of layoffs and the spin-off of four studios. In a memo obtained by The Verge, Sharma set a target for Xbox to achieve player and revenue growth by the end of fiscal year 2027, which runs through next June. She also aims to improve profits to align with industry averages, with every function and studio held accountable for contributing to that outcome. The memo comes after Sharma took over as Xbox CEO in February and implemented sweeping changes to address challenges such as low accountability margins, rising hardware costs, an overextended studio slate, and platform infrastructure deemed 'not built for the battle ahead.'
Sharma’s memo lays out four core priorities for fiscal year 2027, dubbed the 'Four C's': Core (strengthening the platform, led by console), Content (growing games into global franchises), Creation (making Minecraft the world’s creator platform), and Connection (extending the worlds that fans love). These priorities reflect Xbox’s shift from a decentralized studio model to a more focused approach around its strongest franchises and biggest new ideas. This shift is already evident in moves such as the major Fallout push and the exclusivity commitments for Gears of War: E-Day and Clockwork Revolution.
Xbox will measure progress in three stages. The first stage is returning to growth by fiscal 2027. The second stage, spanning fiscal 2028 and 2029, involves turning its bets into growth with 'meaningful player value and revenue acceleration.' The third stage aims for fiscal 2030, targeting halfway to the long-term daily-player goal, sustained double-digit growth in players and engagement, and industry-leading margins. Sharma also shared player metrics, describing Xbox as 'one of the largest stadiums in the world' with more than 100 million daily users, 500 million monthly, and nearly one billion yearly.
Console remains the flagship experience and generates the majority of Xbox revenue, but the company is expanding its platform through Xbox OS, Game Pass, Windows, and streaming to attract new players and developers. To grow in casual gaming, Xbox plans to leverage its King unit, known for Candy Crush, and Microsoft Casual Games. Additionally, Xbox intends to invest in Minecraft more than ever before, signaling a focus on creator-driven content. Three Xbox franchises already generate over $1 billion annually, though Sharma did not specify which ones.
The implications of this strategy are significant for the gaming industry. Xbox is consolidating its studio operations and prioritizing mega-franchises across multiple media, including film, television, consumer products, and live experiences, with new global partnerships, particularly in China. This approach aims to compete more effectively with rivals like Sony and Nintendo, which have long benefited from strong first-party franchises and cross-media expansion. The focus on Minecraft as a creator platform mirrors the trend toward user-generated content seen in games like Roblox and Fortnite.
Reactions from analysts and industry observers have been mixed, with some applauding the clear priorities but questioning the ambitious timeline, especially the goal of entertaining over a billion people daily. The layoffs and studio closures earlier this year have caused concern among developers and fans, though Sharma’s memo emphasizes accountability and long-term planning. The shift to a franchise-centric model may limit creative risks but could stabilize revenue streams.
Looking ahead, Xbox’s success depends on executing these priorities while navigating a rapidly changing market. The company faces pressure to deliver on its fiscal 2027 growth target, and the next few years will be critical in determining whether Sharma’s reset can turn Xbox into a sustained growth engine. With major titles like Gears of War: E-Day and Clockwork Revolution on the horizon, and increased investment in Minecraft, Xbox is betting that a focused, franchise-driven strategy will secure its place as a leading gaming platform for decades to come.
