Xbox is currently in the middle of a “reset” under new CEO Asha Sharma. This so-called corporate reset has mainly consisted of a lot of layoffs, with more to come, as well as Microsoft divesting from many studios and shuffling franchises and teams around, like moving Halo under Activision. And Microsoft CEO Satya Nadella seems pretty pleased with all the cuts and with Sharma’s plans for the brand.
On the newest episode of the Sources Podcast with Alex Heath, Nadella briefly talked about Xbox and how gaming has been a part of Microsoft since 1982’s Microsoft Flight Sim. As for the current state of Xbox, the Microsoft CEO feels “fantastic” about the various franchises it owns, but seems less happy about how much money Xbox is making.
“I feel fantastic about the IP we have right now,” said Nadella on the podcast. “If I look at the studios, the IP portfolio we have, and our ability to then take that and produce great games going forward, I feel fantastic.”
And as for the layoffs which have led to over 1,600 Xbox employees being cut from the company this year with plans for another 1,600 cuts before the fiscal year ends, Nadella offers up no empathetic statement or even a fake apology. It’s just dandy, really, that people are out of work as part of a larger plan to ensure Xbox grows, grows, grows.
“There’s some amount of streamlining the team is doing, and Asha is doing, which is great to see,” said Nadella. “And then we have to invent the right sustainable business model that allows us to deliver gaming to more and more people. That has always been the goal, which is, we want to be a great publisher and a great platform provider for games across both PCs and Xboxes.”
“And so that is sort of our goal. And I think Asha and team have said that Xbox is going to get growth this next fiscal year. And that’s the plan they’re executing on, and in that process do a bang-up job of producing some great games.”
Remember that Sharma’s ambitious (and likely impossible) goal is for Xbox to become a company that “entertains more than a billion people each day.” This is the same company that is selling so few Xbox consoles that it won’t share its numbers publicly, and that reported 500 million monthly users in 2025 across all its platforms. And it wants to reach more than a billion a day, while making more money than before, and will do all of this with fewer studios and devs. It’s a bold strategy, Cotton. Let’s see if it pays off for them.
