XBOX CEO CHARTS RECOVERY AFTER MAJOR RESTRUCTURING

Asha Sharma, Xbox's CEO, has set clear targets for the gaming division after a major organizational reset that included thousands of job cuts and the separation of four studios. In a memo obtained by The Verge, Sharma told staff that Xbox will achieve "player and revenue growth" by the end of fiscal year 2027, which concludes in June 2026. The company also plans to "improve profits back in line with industry averages," according to the memo. Sharma emphasized accountability across the organization, stating: "Every function and studio will own part of that outcome." The reset represents a significant shift for Xbox after a challenging period marked by underperforming game releases and questions about the division's strategic direction. The restructuring included substantial workforce reductions and the spinning off of development studios, signaling Microsoft's commitment to a leaner, more focused operation. The fiscal 2027 timeline gives Xbox approximately 18 months to demonstrate measurable progress. Sharma's memo frames the reset as a necessary corrective action, with the new priorities centered on returning to sustainable growth metrics. Xbox has faced competitive pressure in the console market and struggles to match PlayStation's exclusive game lineup. The reset and subsequent memo suggest Microsoft is responding to these challenges with concrete performance benchmarks rather than vague strategic statements. Sharma's emphasis on industry-standard profit margins indicates Xbox is not expected to match peak profitability levels immediately, but rather to operate within normal ranges for gaming divisions. This suggests realistic expectations about the timeline for recovery. The memo's focus on accountability across all functions signals that turnaround efforts will span development, publishing, services, and operations—not just game production.