Xbox has spent the last decade trying just about everything to reignite the brand. Now, its new leadership believes it has finally found the answer — at a cost. Speaking to The Game Business, Xbox’s new Chief Strategy Officer Matthew Ball revealed that current CEO Asha Sharma asked him whether the brand could still be turned around. “When I sat down with Asha for the first time, she asked me: ‘Is it fixable?’ I’m a strategic optimist,” Ball said. “I joined because what she told me she wanted to achieve, I believed was right and achievable.”
That turnaround centers around rebuilding the wall that Phil Spencer spent years tearing down: console exclusives. According to Ball, a multiplatform strategy has helped put Xbox games in front of more players, but it also weakened one of the biggest reasons to buy its hardware.
“It has become difficult to articulate why you should pick an Xbox console. Exclusives are an important way to do that,” he admitted. He continued that releasing games on PlayStation would almost certainly generate more sales, yet Xbox might be willing to make that sacrifice. By keeping two games — Gears of War: E-Day and Clockwork Revolution — exclusive, Sharma’s team is making it clear that rebuilding the Xbox brand now takes the utmost priority.
“We have no desire to move away from the console business. And dying? No. It’s not declining. It is growing. It’s going to have a great year this year,” said Ball. Bloomberg’s recent report showed a glimpse into just how serious this strategy shift appears to be — with Sharma ready to make an enemy out of PlayStation again.
According to the media’s sources, a PS5 version of Gears of War: E-Day had already been in development and was expected to launch, with retailers preparing to take PlayStation preorders. A Halo: Campaign Evolved trailer was also supposed to appear at June’s State of Play stream, but was pulled at the last minute. Xbox employees were said to be taken aback by this sudden shift, as it could potentially ‘damage the relationship’ between Microsoft and Sony, said people familiar with the matter.
But straining relations with Sony may be the least painful sacrifice the company has to make. In a memo published on Xbox.com, Sharma revealed that it has spent more than $20 billion on ‘content, platform investments, and hardware subsidies’ over the past five years. And that’s excluding the industry-breaking Activision Blizzard deal. However, despite that massive amount of spending, yearly revenue has declined by nearly half a billion dollars. “Going forward, this cannot continue,” Sharma wrote.
As a result, Bloomberg added that the company is preparing ‘significant layoffs’ shortly after Microsoft’s fiscal year ends on June 30. As Sharma begins a broader overhaul of the gaming division, it’s also expected to make substantial cuts to marketing and other business operations. “Our current platform infrastructure is not built for the battle ahead,” she wrote in the note.
More than 2,550 jobs in the gaming division were eliminated in 2024 alone. In 2025, Microsoft followed that up with over 6,000 company-wide layoffs, including across Xbox.
Amid all of that, though, Ball remains optimistic that Xbox can still course correct and send positive signals across the industry. “If we can turn this company around and grow it, then the rest of the industry can in aggregate, too,” he concluded.
