Much ink has been spilled already about what the latest round of mass layoffs at Xbox means for the future of Microsoft’s gaming business, including by its own leaders. One thing that’s becoming clear is that even as the company retreats into its biggest blockbuster franchises, Microsoft’s ambitions still go well beyond having a strong Xbox console ecosystem. “I think our core has to be healthy, and that will be necessary but not sufficient,” Xbox CEO Asha Sharma said in a new interview with Fortune.
She was critical of Xbox’s last decade in that regard. “In order to grow, we made a bunch of bets … and as we did that, we inherently didn’t focus on the core business,” she said. “The number one measure of your strategy is what you put your resources behind, and we simply spread ourselves too thin.” She could have been referring to the sprawling network of game studios acquired by her predecessor, Phil Spencer, five of which are now being spun off, while several others face substantial cuts as part of the 3,200 layoffs taking place across Microsoft’s gaming business in its current fiscal year.
While Sharma has thrown red meat to hardcore fans in the form of a trickle of new console exclusives, including Gears of War: E-Day, she also reportedly feels like Minecraft and other gaming tentpoles at the company have been underutilized. A source told Game File that the mega-popular online crafting sim has effectively been funding much of the rest of the Xbox studios’ teams, even as the game itself fell behind competitors like Roblox.
“I want Xbox to be one of the few companies that entertains more than a billion people each day and gives everyone the opportunity to create and connect,” Sharma wrote this week when announcing the company’s latest round of mass layoffs (they’ve had them every year since the Activision Blizzard deal closed). “I know we can achieve this goal. Xbox has many of the most beloved franchises in entertainment history, talented studios around the world, and we will return to growth in 2027.”
That ambitious metric would turn Xbox into a platform that dwarfs rivals like Steam and PlayStation, but the road to it, if it’s not a mirage altogether, leads far beyond console. It would require having the most popular mobile games in the world, and an exponentially larger presence on PC. Is that a bold new strategy or more of the same? I guess that will depend on whether or not it actually works this time.
