Microsoft appointed Asha Sharma as head of Xbox with the goal of making the gaming division more profitable. Earlier this summer, she announced a major Xbox reset that includes cutting costs, laying off employees, shutting down or separating underperforming studios, and focusing on key franchises. The company is also actively preparing for the launch of its next generation console.
Microsoft CEO Satya Nadella believes Sharma is doing a good job with the task she was given. During a recent episode of the Sources Podcast, he said he was “incredibly pleased” to see the changes taking place across the company. According to Nadella, the current restructuring should help Xbox make better use of its studios and extensive IP portfolio while building a sustainable business model for releasing games on both PC and Xbox.
When I look at our studios, the portfolio of IP that we have, and our ability to use all of that to create great games in the future, I feel incredibly optimistic.
«The team, and Asha in particular, is optimizing the business structure in some ways right now, and it is pleasing to watch. Now we need to create the right sustainable business model that allows us to bring games to more and more people. That has always been our goal: we want to be a great publisher and a great gaming platform both on PC and on Xbox. At the same time, these comments have drawn criticism from some gamers and industry observers, as Nadella's wording can be interpreted controversially in the context of mass layoffs, canceled projects, and major changes to Xbox's studio structure», — Satya Nadella, CEO of Microsoft
Putting the emotional reaction aside, Sharma is carrying out the restructuring task assigned to her. Xbox is reportedly expected to generate significant profit as early as the second quarter of the next fiscal year, which would mark the first such result in the division's 25 year history.
Last week, Microsoft announced another 267 layoffs across several divisions. Around 2,000 employees have reportedly lost their jobs across Xbox this year, with further cuts still expected.
As part of the latest restructuring, the Halo franchise was transferred to Activision, Obsidian is being merged with Bethesda, while Ninja Theory and Arkane are reportedly facing closure. Several months ago, Double Fine, Compulsion Games, and Undead Labs were also separated from Xbox.
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