Xbox CEO Asha Sharma has told employees that Microsoft’s gaming business has until the end of fiscal 2027 to get back to player and revenue growth, according to an Xbox growth memo obtained by The Verge. The deadline lands after a broad Xbox reset that The Verge said included thousands of layoffs and the spinoff of four studios.
Sharma, who took over Xbox in February, also told staff that the business must bring profits back in line with industry averages, The Verge reported. The message makes clear that the target is not being assigned to some abstract strategy deck. Sharma said every function and studio will be responsible for part of the result.
What did the Xbox growth memo say?
The memo lays out four priorities for Xbox in fiscal 2027: strengthening the core platform with console at the center, turning major games into global franchises, making Minecraft a creator platform, and expanding existing fan-favorite worlds. The labels in the memo are Core, Content, Creation and Connection, according to The Verge.
Sharma framed the plan in three phases. First, Xbox is supposed to return to growth by the end of fiscal 2027, which runs through next June. Then, in fiscal 2028 and fiscal 2029, those four priorities are expected to become businesses that add player value and increase revenue. By fiscal 2030, Sharma said Xbox’s ambition is to be halfway toward its longer-term daily-player goal, with double-digit growth in players and engagement and margins ahead of the industry.
That is a lot of future-tense management prose, and the memo gives only limited hard numbers. Sharma wrote that Xbox reaches more than 100 million people daily, more than 500 million monthly and nearly one billion yearly, The Verge reported. She also said console still produces most Xbox revenue and remains the business’s main fan experience, while the Xbox operating system, Game Pass, Windows and streaming are positioned as paths to new players and developers.
Why is Xbox changing its studio model?
According to Sharma’s memo, Xbox is moving away from a decentralized studio structure toward one organized more tightly around its strongest franchises and major new ideas. In practice, that means fewer scattered bets and more pressure on the games and brands Microsoft believes can carry the business.
The Verge connected that shift to recent signs of a bigger push around Fallout. Sharma said Xbox plans long-term franchise work across film, television, consumer products, sponsorships, live experiences and global partnerships, including in China. She also wrote that three Xbox franchises already bring in more than $1 billion a year, though she did not identify them.
The memo follows months of upheaval. Sharma has previously cited Xbox problems including weak accountability, rising hardware component costs, too many studios stretched across the organization and platform infrastructure she described as unfit for the fight ahead, according to prior Microsoft and Xbox communications cited by The Verge.
Microsoft has also tightened some game strategy choices. The Verge reported that Xbox made Gears of War: E-Day and Clockwork Revolution Xbox console exclusives, and GamesRadar reported that more exclusivity moves are planned. That sits beside Sharma’s broader goal of making Xbox one of the few companies entertaining more than a billion people each day, a target The Verge characterized as nearly impossible.
For casual games, Sharma said Xbox will rely on Candy Crush maker King and Microsoft Casual Games, according to The Verge. She also said Microsoft plans to invest in Minecraft more than it has before. The memo’s practical message is blunt enough: after layoffs, studio sales and strategy whiplash, Xbox now has a dated growth target and a shorter list of things it says it wants to be good at.
This story draws on original reporting from The Verge.
