Xbox growth memo gives Asha Sharma one-year turnaround target
Asha Sharma told Xbox staff the business must return to player and revenue growth by the end of fiscal 2027, The Verge reported.
By James Whitfield · Staff Writer
3 min read
Xbox CEO Asha Sharma has told employees in an Xbox growth memo that Microsoft’s gaming business must return to player and revenue growth by the end of fiscal 2027, according to The Verge. The target follows a broad Xbox reset that included thousands of layoffs and the spinout of four studios.
The Verge reported that Sharma also set a goal of bringing profits back in line with industry averages. Microsoft’s fiscal 2027 runs through next June, giving the Xbox organization less than a year to show a turnaround on those measures.
Sharma, who became Xbox CEO in February, has already made wide changes to the business, The Verge reported. She previously pointed to several problems facing Xbox, including rising hardware component costs, weak accountability margins, too many studios spread across the organization and platform infrastructure she said was not prepared for the company’s next phase.
What did the Xbox growth memo say?
According to The Verge, Sharma organized Xbox’s fiscal 2027 plan around four priorities: strengthening the platform with consoles at the center, expanding games into global franchises, making Minecraft a broader creator platform and extending popular Xbox worlds beyond games.
Those priorities were described in the memo as “Core,” “Content,” “Creation” and “Connection,” The Verge reported. Sharma told staff that each function and studio would be responsible for part of the company’s growth and profit goals.
The memo also set out three time periods for judging progress, according to The Verge. The first is a return to growth by the end of fiscal 2027; the second, in fiscal 2028 and fiscal 2029, is turning Xbox’s major initiatives into businesses that produce more player value and faster revenue growth; the third is scaling what works by fiscal 2030.
By fiscal 2030, Sharma said Xbox aims to be halfway toward its long-term daily-player goal while producing double-digit growth in players and engagement and stronger margins, The Verge reported. The Verge previously reported that Sharma has set a goal for Xbox to entertain more than 1 billion people each day.
How Xbox plans to grow
Sharma gave staff broad figures for Xbox’s audience, according to The Verge. She said Xbox brings together more than 100 million people daily, more than 500 million monthly and nearly 1 billion annually.
The memo described the console business as the main source of Xbox revenue and the base of its fan community, The Verge reported. Sharma called console Xbox’s flagship experience, while saying Xbox’s operating system, Game Pass, Windows and streaming are the platform for reaching new players and developers.
Xbox is also changing how it runs its studios, according to The Verge. Sharma said the company is moving away from a decentralized structure toward a system centered more tightly on its strongest franchises and major new ideas.
That approach includes building long-term plans for large franchises across film, television, consumer products, sponsorships, live experiences and new international partnerships, including in China, The Verge reported. Sharma said three Xbox franchises already generate more than $1 billion each year, though she did not name them.
The company’s plans also cover casual games and Minecraft. According to The Verge, Sharma said Xbox will use King, the maker of Candy Crush, and Microsoft Casual Games to grow in casual gaming, while investing in Minecraft more than before.
The reset has also affected Xbox’s release strategy. The Verge reported that Xbox made Gears of War: E-Day and Clockwork Revolution console exclusives and is planning more exclusive releases as part of Sharma’s changes.
This story draws on original reporting from The Verge.