Xbox is making some big changes — again. On June 10th, a few months after Asha Sharma took over as CEO, she and newly-promoted chief content officer Matt Booty sent a memo to staff warning of an “Xbox reset.” The business, they said, is facing significant challenges, including a 3 percent “accountability margin,” massively higher component prices for consoles due to the memory and storage shortage, and an “over extended” studio system.
That same day, The Verge and Bloomberg reported that the Xbox division was planning layoffs in July. The cuts, expected to be announced on July 6th, could include studio closures or spinoffs. The Verge’s Tom Warren reported on June 30th that Microsoft is looking at closing at least five studios and potentially canceling games like Blade.
Under Sharma’s leadership, Xbox has already made some other major changes, including upcoming price hikes for Xbox consoles, lowering Game Pass prices but cutting out new Call of Duty games, rebranding Xbox to XBOX, and making both Gears of War: E-Day and Clockwork Revolution Xbox console exclusives.
Read on for all of our coverage of the shifts at Xbox.
Jun 30
Xbox will reportedly still publish Hideo Kojima’s OD.
Xbox is expected to make some tough cuts soon, and it already dropped a new franchise from IO Interactive, but OD will continue to be part of Xbox’s publishing lineup, according to IGN.
[IGN]
- Jun 30
007 First Light’s developer lays off staff but claims its next franchise will continue
Image: IO InteractiveIO Interactive, the studio behind the Hitman series and 007 First Light, announced that it is laying off staff after a relationship with an “external partner” on its next big franchise, Project Fantasy, “has come to an end.” IO has described Project Fantasy as an “online fantasy RPG”, and Kotaku and Bloomberg report that Microsoft, which is planning significant cuts as part of a broader “reset” of the Xbox business, was going to be the game’s publisher.
It’s unclear how many people will be affected by IO’s “staffing decisions.” The company says “we are fully committed to supporting those affected through this challenging transition.” IO also notes that it remains “100% committed to” Project Fantasy and promises that “this wonderful universe will see the light of day.”
Jun 30
Xbox weighs canceling Blade game and shuttering Arkane
Image: MicrosoftMicrosoft is set to announce a wave of layoffs for its Xbox studios and employees next week. Sources familiar with Microsoft’s plans tell The Verge that the layoffs will lead to studio closures or spinoffs, potential mergers of studios, and canceled games.
I understand Microsoft is currently weighing closing at least five studios, including the developers behind Marvel’s Blade. Sources tell me Microsoft wants to cancel Blade as part of a wave of cost cuts and job losses that are planned for the company’s Xbox gaming division.
- Jun 25
Xbox prices spike another $100 or more
Photo by Vjeran Pavic / The VergeMicrosoft is increasing the prices of Xbox consoles again. Starting August 1st, 512GB models will be $100 more expensive, while 1TB models will be $150 more expensive. This means that the Xbox Series S will start at $499.99, the Xbox Series X without a disc drive will start at $749.99, and the Series X with a disc drive will start at $799.99. Microsoft also says it will be “sunsetting” its 2TB Xbox Series X.
Microsoft last raised prices in October by $20 to $70 and says it had hoped to avoid further hikes. “Unfortunately, console storage and memory prices have increased by more than 2.5x and we expect another doubling by the fall of 2027,” Microsoft says in a blog post. “The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles. Unlike phones, computers, speakers, and other consumer devices, consoles are typically not sold at a profit, but instead for less than they cost to make.”
- Jun 15
Jay Peters and Tom Warren
Xbox is closing down Hellblade creator Ninja Theory
Image: Ninja TheoryXbox is closing down Ninja Theory, the studio behind the Hellblade series, a source tells The Verge. Staffers were told on a call on Monday about the closure, but they are hoping the studio will find a buyer. The closure comes as “several” Xbox studios at Microsoft, including Compulsion Games and Double Fine, are in “active negotiations” about spinning off, Bloomberg reports.
The closure and negotiations follow Xbox CEO Asha Sharma and chief content officer Matt Booty warning last week of a “reset” at Xbox, laying out several challenges facing Xbox’s business — including that it had “over extended” with its studio system and the hardware component crisis is significantly driving up prices. Kotaku reported earlier on Monday that Microsoft was planning to shut down Compulsion, though it noted in an update that studio leadership was in “negotiations” with Microsoft.
- Jun 15
Xbox turmoil continues with a studio closure and executive departures
Image: The VergeLast week, Xbox boss Asha Sharma sent a memo warning of an Xbox “reset” ahead of expected layoffs, and today, Kotaku reported that Xbox plans to shut down Compulsion Games, the studio behind South of Midnight.
Since taking over in February, Sharma has made some big decisions, including cutting the price of Xbox Game Pass and making Gears of War: E-Day and Clockwork Revolution Xbox console exclusives. But in their “reset” memo, Sharma and chief content officer Matt Booty discussed many challenges facing the Xbox business, including that it has “over extended” with its studio system:
Jun 13
Microsoft hasn’t ruled out spinning off Xbox
Asha Sharma. Image: The Verge, MicrosoftMicrosoft is preparing to lay off a significant chunk of its Xbox division and is reevaluating the plans for its next-generation Project Helix console. It’s apparently also considering dramatically restructuring its relationship with Xbox, and hasn’t ruled out spinning it off into a separate company.
A new report from The Information suggests that Microsoft has considered some dramatic measures to make its Xbox unit more sustainable. That includes turning it into a wholly owned subsidiary, a joint venture, or even spinning it off entirely, with the possibility of selling the business. The report doesn’t suggest anything is imminent, but it does seem that new Xbox CEO Asha Sharma and Microsoft CEO Satya Nadella haven’t taken anything off the table when it comes to the future of Xbox.
- Jun 10
Tom Warren and Jay Peters
Xbox warns of a ‘reset’ as it prepares for layoffs
Image: The VergeMicrosoft’s Xbox division will be hit with significant layoffs next month, according to people familiar with Microsoft’s plans.
The company has been preparing for the layoffs internally for weeks, with Xbox CEO Asha Sharma hinting about “making hard choices” last month. Sources suggest the cuts could even involve a studio closure, or changes to the Xbox studio lineup. In a recent Giant Bomb episode, rumors of 1,000 layoffs for Microsoft’s Xbox division were mentioned. Bloomberg also reported today that the cuts would be “major,” and involve budget cuts for marketing and other areas of Microsoft’s Xbox business.
- Jun 10
Xbox exploring ‘radically different’ console business models
Photo by Vjeran Pavic / The VergeThe RAMageddon crisis has got Microsoft rethinking its Xbox console hardware business. Xbox CEO Asha Sharma and Xbox strategy chief Matthew Ball have both revealed this week that Microsoft is reevaluating plans for its next-generation Project Helix console and exploring “radically different” console business models in the meantime.
“We are working very hard to rethink everything that we can about Helix, which is a console we are committed to shipping, and we are very cognizant of the ways in which we need to change as a company to make sure it is affordable, to make sure that it’s flexible,” said Ball in an interview with The Game Business earlier this week.
Jun 9
RAMaggedon’s making Xbox “rethink” its Helix console.
During an interview with The Game Business at Summer Game Fest, Xbox strategy chief Matthew Ball admitted to “underestimating” the RAM crisis, saying that demand for Xbox consoles “exceeds supply.” It’s pushing Xbox to re-evaluate its plans for its next-gen Helix console:
“We are working very hard to rethink everything that we can about Helix, which is a console we are committed to shipping, and we are very cognisant of the ways in which we need to change as a company to make sure it is affordable, to make sure that it’s flexible.”
- Jun 8
Xbox exclusives are back and more complicated than ever
Illustration: The VergeTwo years ago, when Microsoft first revealed that it was bringing four Xbox-exclusive games to the PS5 and Nintendo Switch, it made the announcement far more complicated than necessary. That’s not likely to improve anytime soon. In fact, things now seem more confusing than ever as the company tries to appease both fans and the bottom line.
When making the experimental move away from exclusives in 2024, Microsoft initially refused to name the games — Hi-Fi Rush, Pentiment, Sea of Thieves, and Grounded — going cross platform, but was happy to shoot down rumors of Starfield and Indiana Jones coming to the PS5. Some Xbox fans thought the announcement meant “just four games,” others worried it was more, setting the stage for two years of confusion over what other titles would or would not be released on rival platforms. Eventually, Starfield and Indiana Jones both arrived on the PS5, only adding to the uncertainty.
- May 20
Xbox hires game industry analyst Matthew Ball to lead strategy
Illustration: The VergeMicrosoft has recruited game industry analyst Matthew Ball as Xbox chief strategy officer. Ball publishes an annual state of video gaming report, which is a popular read across the game industry, and he’s “widely respected across gaming, media, and technology,” according to Xbox CEO Asha Sharma.
Sharma announced Ball is joining Microsoft in a memo to Xbox employees this morning, seen by The Verge. She described Ball as a “longtime gamer,” who has held strategy and leadership roles at Illumination, Amazon Studios, Otter Media, and Accenture Strategy. “Matthew has been partnering with us on strategy since day 10 and will officially start this month, reporting to me,” says Sharma.
- May 19
Xbox fans want exclusives, more backward compatibility, and free online multiplayer
Illustration by Alex Castro / The VergeMicrosoft launched a new Xbox Player Voice portal yesterday, aiming to collect feedback from fans and “make it more visible.” It certainly hasn’t taken long for Xbox fans to make their feedback very clear. The most upvoted feedback on Xbox Player Voice demands exclusive games for Xbox consoles, more backward compatible games, and free online multiplayer.
Xbox CEO Asha Sharma has already promised that she’s “reevaluating” the approach to Xbox-exclusive games and windowed releases of titles, but there has been no firm commitment to reverse the decision to port games to PlayStation and Nintendo Switch. “Xbox was built off of great game exclusives, you cannot sell any consoles without a reason to buy the console compared to your competition or even sending your tentpole games over to your competitor,” says Xbox fan Carlos Hernandez in a feedback post that has been upvoted nearly 7,000 times.
- May 15
Xbox is now XBOX
Image: Cath Virginia / The VergeXbox just allcapsmaxxed: Meet XBOX. This isn’t a joke; Microsoft appears to be actually rebranding Xbox to XBOX. Asha Sharma, Xbox CEO, ran a poll on X earlier this week, asking fans whether Microsoft should use Xbox or XBOX. The results were in favor of XBOX, and the company has now renamed its X account.
Curiously, the Threads and Bluesky accounts for Xbox haven’t been renamed yet, but if Microsoft is going ahead with a rebranding then I expect those will change soon. I asked Microsoft to comment on this potential Xbox rebranding and the company simply referred me to Sharma’s post.
- May 7
Inside the return of Xbox
Image: MicrosoftTwo weeks ago there was a buzz in the air inside Microsoft’s studio D building. Hundreds of Xbox employees gathered early on a Thursday morning, packed into the hallways and atrium, to hear from Xbox CEO Asha Sharma. The “return of Xbox” slogan was plastered all over the walls of the building, the same message Sharma first delivered to Xbox employees in February. It was time for Sharma to rally the troops, after two years of turbulence, and hint at the future of Xbox.
During the roughly 40-minute all-hands, sources tell me that Sharma laid out a four-point action plan for Xbox employees, focusing on several areas in turn: hardware, games, platform, and services. “We have to be honest about where we are. We’ve got work to do,” admitted Sharma. “Players are frustrated with us, they feel like we haven’t updated our console enough, they feel like our PC presence isn’t very strong.”