Microsoft’s gaming division is facing a period of difficult decisions under its new leadership. Asha Sharma, who took over as head of Xbox earlier this year following Phil Spencer’s departure, has reportedly told employees that hard choices lie ahead as the company works to repair its relationship with dedicated fans while also driving revenue growth.
Since stepping into the role, Sharma has moved quickly to reshape Xbox. She ended the divisive “This is an Xbox” marketing push and rolled out several new console features in rapid succession. The moves suggest an effort to rebuild trust with the platform’s core audience after a turbulent stretch.
The Verge obtained an internal memo sent to Xbox staff that outlined recent rebranding work. The memo also noted that Microsoft plans to be more deliberate in its gaming strategy going forward. The company has officially shifted from “Xbox” to “XBOX” in its branding.
“We are building a stronger XBOX,” Sharma reportedly said. “That means making hard choices about what we build, where we invest, and what kind of company we need to be going forward. That is part of what you are starting to see in the shift from Xbox to XBOX. It reflects a decision to be deliberate in how we show up for the players who care most about this brand.”
The specific nature of these hard choices remains uncertain. A reversal of Microsoft’s next-generation console plans appears unlikely, particularly given that the company discussed its upcoming hardware initiative, known internally as Project Helix, as recently as early May. The more concrete possibility is that Microsoft is evaluating difficult decisions about which games to continue developing and which studios to maintain. Even without counting Bethesda and Activision Blizzard, Microsoft maintains an extensive network of first-party developers. Project cancellations could be on the table.
Sharma pointed to recent Xbox Game Pass adjustments as evidence of progress. Microsoft reversed course on a price increase from last year, lowering subscription costs instead. The company also removed day-one Call of Duty launches from the service, opting to add new entries like this year’s Modern Warfare 4 twelve months after their initial retail release.
“Growth slowed down and subscriber loss accelerated after the pricing and SKU changes last year,” Sharma said. “Since our price reduction we have seen acquisitions grow and retention improve, which is a good first step.”
Some of the recent Xbox Game Pass additions have helped shore up the catalog as Microsoft recalibrates its approach.
Whether exclusives factor into these hard choices is another open question. Reports from earlier this month indicated Sharma was proceeding cautiously as she determined how to handle exclusive titles. Microsoft has stated it will reevaluate its approach to exclusivity, a statement that carries weight for core fans who believe Xbox consoles have lost value during the company’s multiplatform expansion. Xbox fans have been vocal about wanting a return to console exclusives, a sentiment that topped the newly launched XBOX Player Voice feedback platform.
The full scope of Sharma’s vision should become clearer at the Xbox Games Showcase on June 7. Microsoft is expected to reveal Gears of War: E-Day, a new mode for Modern Warfare 4, and additional announcements. With the current console generation approaching its sixth anniversary, the event will offer crucial insight into where Xbox heads next.
