Xbox CEO Outlines Plan to Reset Business Amid Game Pass Setbacks
Xbox CEO Asha Sharma has outlined her plan to 'reset' the Xbox business, which includes mass layoffs and selling off studios.
Xbox CEO Asha Sharma has outlined her plan to 'reset' the Xbox business, which includes mass layoffs and selling off studios.
Xbox CEO Asha Sharma has announced a strategic reset for the Xbox business, attributing the need for change to the underperformance of initiatives like Xbox Game Pass. Despite efforts to expand the platform with more titles and content, the anticipated growth did not materialize as expected. Sharma emphasized the necessity to refocus and reset the Xbox division amidst what she described as the most severe hardware crisis in the industry's history.
Microsoft's Xbox Game Pass, launched in 2017, initially gained popularity with over 34 million subscribers before experiencing a decline. The Wall Street Journal reported a drop to around 30 million subscribers, indicating a significant loss. The company's aim to reach 77 million subscribers by 2026 now seems unattainable, prompting reflections on the sustainability and appeal of the subscription model.
The challenges faced by Xbox Game Pass include difficulties in convincing users of its value, unsuccessful PC and cloud integration efforts, and controversial pricing strategies. Microsoft's decision to raise the price of Xbox Game Pass Ultimate by 50% in 2025 led to a notable subscriber exodus, subsequently reduced to $23/month. Despite these setbacks, Xbox CEO Sharma did not disclose specific future changes for Game Pass, hinting at potential adjustments to come.
Sharma's acknowledgment of past missteps, including investments in a broader content portfolio and cross-platform releases, signifies a shift towards prioritizing projects with higher success probabilities. While no first-party game cancellations have been announced, the Xbox division is poised for significant restructuring and strategic realignment.
