Xbox CEO Outlines Four Priorities for Growth Recovery After Major Restructuring

Microsoft’s gaming division Xbox has unveiled a new growth strategy following a major restructuring. Xbox CEO Asha Sharma stated in an internal memo that the company aims to restore player numbers and revenue growth by the end of fiscal year 2027 (June 2027). According to a memo obtained by The Verge, Sharma wrote, “We will return Xbox to player growth and revenue growth.” She further added, “We will improve profitability to match the industry average,” and noted that “every function and studio will be part of that outcome.”

Background of the Major Restructuring

Since Sharma became Xbox CEO in February, the company has undergone a rapid and large-scale transformation. Thousands of employee layoffs and the separation and independence of four studios are at the core of a restructuring that Valve described as a “reset.” Sharma herself previously cited low accountability margins, rising hardware component costs, an overly expanded studio structure, and a platform infrastructure “not ready for the battles ahead” as key challenges.

As part of this restructuring, Xbox has decided to make Gears of War: E-Day and Clockwork Revolution exclusive to Xbox consoles, indicating a plan to continue this policy going forward. At the same time, Sharma has set an extremely ambitious and difficult goal of making Xbox “one of the few companies that entertains over one billion people a day.”

Four Priorities

In the memo, Sharma outlined four priorities for fiscal year 2027. They are all organized around keywords starting with “C.”

1. CORE: Strengthening the platform centered on the console
2. CONTENT: Growing great games into global franchises
3. CREATION: Making Minecraft a global creator platform
4. CONNECTION: Expanding the worlds that fans love

These four pillars indicate that Xbox plans to maintain its traditional console-focused approach while simultaneously expanding the platform ecosystem and strengthening content IP. In particular, positioning Minecraft as a “creator platform” can be interpreted as a strategy to drive growth through user-generated content (UGC).

Three-Stage Growth Plan

Sharma divided the process for achieving the goals into three stages.

The first stage is returning to growth by the end of fiscal year 2027. The second stage is translating investments into concrete growth. The memo states, “In fiscal years 2028 and 2029, the four Cs and the roadmap must transition into a business that generates meaningful player value and revenue acceleration.” The third stage is “scaling what works,” with the goal of “reaching the midpoint of our long-term target for daily active players, achieving sustainable double-digit growth in players and engagement, and industry-leading margins” by fiscal year 2030.

This plan clearly distinguishes between short-term restructuring and medium- to long-term growth, with an apparent intention to set specific performance indicators at each stage. In particular, the phrase “industry-leading margins” reflects an emphasis on profitability in the highly competitive gaming market.

Current State of the Player Base

Sharma provided some specific figures regarding Xbox’s current player base, though not overly detailed. She wrote, “Xbox is one of the largest stadiums in the world, gathering over 100 million people every day, over 500 million every month, and nearly 1 billion every year.”

These numbers are likely an aggregate of Microsoft’s entire gaming-related services (including games on Windows, cloud gaming, and mobile) rather than Xbox standalone active users.

Sharma also noted that the console “generates the majority of Xbox revenue and remains the foundation of fandom.” While positioning the console as the “flagship experience,” she added that Xbox OS, Game Pass, Windows, and streaming technology “will become a platform for new players and developers.” This balanced expression suggests a strategy of expanding the surrounding ecosystem while keeping the console as the axis, rather than over-relying on cloud and subscriptions.

Centralization of Studio Structure

Xbox is transitioning its studio operating model from the previous decentralized system to one that “focuses on the strongest franchises and the biggest new ideas.” This change has already become apparent in the form of resource concentration on specific major titles and studio restructuring.

Under the previous decentralized model, each studio had a certain degree of autonomy. However, in this restructuring, maximizing franchise value and efficient allocation of development resources will take precedence. Balancing individual creative discretion with the overall strategic goals of the company will be a future challenge.

Editorial Opinion

In the short term, Sharma’s goal of returning to growth by the end of FY2027 represents the completion of a “stop the bleeding” phase following large-scale layoffs and studio consolidation. However, it remains unclear how long the impact on the development pipeline from the layoffs and studio separations will last. To achieve growth within FY2027, at least one major title announcement within the year seems necessary. In the long term, the strategy of turning Minecraft into a creator platform is noteworthy. Whether Xbox can independently build a UGC ecosystem like Roblox or Fortnite will be a core element of the 2030 goals. Furthermore, it remains to be seen whether a two-tier strategy that keeps the console as the foundation while positioning Game Pass and cloud as complementary will differentiate Xbox from competitors Sony and Nintendo. The editorial team would like to point out that “CONNECTION” is the vaguest of the four Cs in terms of specific content. While cross-play and social features enhancements are assumed, it is unclear at this point how much return on investment this will generate. Additionally, the risk that studio centralization could undermine creative diversity cannot be denied.

References

• “Xbox CEO lays out priorities in memo after major ‘reset’”, by Jay Peters — The Verge, 2026-07-30T22:10:13.000Z (ARR)
• Source URL: https://www.theverge.com/games/973520/xbox-ceo-memo-one-year-growth