There have been a lot of rumors and innuendo about the state of Xbox recently. That can all be finally put to bed thanks to a rather long post by Asha Shar, the CEO of Xbox. The situation at Xbox is bad, but not as bad as previously reported. Over 3,200 people will lose their jobs throughout Microsoft’s 2027 Fiscal year. That is devastating news, and we hope everyone affected lands on their feet quickly.
The silver lining for gamers in this situation is that studios are not being shut down. They will either have new ownership, go independent, or perhaps a combination of both. Asha specifically stated that Compulsion Games and Double Fine will “return to management and transition to independent studios with their IP,” which is great news for the studios themselves. Ninja Theory and Undead Labs have agreed to terms that will allow them to join new ownership with the funding to complete the upcoming Senua, as well as State of Decay 3. This portion of the announcement is great news as it has been rumored for a little while now that Senua, as well as State of Decay 3, might get canceled as a part of the “most significant restructure in Xbox history.”
Asha talked about how they will simply processes across the board, to try and make sure Xbox can better serve its audience. As an example, Asha mentioned that in some parts of Microsoft, work goes through as many as 14 layers of management. It can be incredibly hard to have a cohesive vision with that many cooks in the kitchen. She stated that one of her goals is to reduce that number drastically with no more than five management layers instead of the fourteen. In cases where it is plausible, she would like to get it down to three layers.
Another move in this restructuing is the announcement of a Chief Operating Officer that will be reponsible for “end-to-end P&L responsibility across content, hardware, platform, and services.” The new COO will be Helen Chiang, someone who has been at Microsoft for over two decades helping to build some of their business such as Xbox Live, and the Minecraft franchise.
Asha also announced investments are being shifted to focus on projects that are a higher priority for Xbox. These potential changes will vary in size and affect Activision, Bethesda/Zenimax, Blizzard, King, Mojang, and Xbox Game Studios. Something that gamers everywhere will be relieved to hear is that none of the first party titles that have been publicly announced are being canceled as part of these reductions.
Asha spoke about the financial realities of the situation, and that in a typical year, Xbox lost 64 cents for every dollar it made. To put that in perspective, that means that Xbox lost 64 million dollars for every 100 million they made. That statistic is insane, and not in a good way. One has to wonder what the previous administration was doing. Is the current state of Xbox solely their fault, or does everything go to the top with Satya Nadella, with Phil Spencer and Sarah Bond being the scapegoats?
We have linked to Asha’s full statement below (as well as statements from some of the other companies throughout this article). Take a look for yourself and then tell us what you think on Bluesky and Twitter.
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