The Woman Fixing a Microsoft Mess With Brutal Honesty

Microsoft's gaming division is undergoing a major strategic overhaul under new Xbox CEO Asha Sharma, who took the helm following the departure of longtime leader Phil Spencer. The division is confronting severe operational and financial challenges, including declining annual revenue of approximately $23 billion, a meager 3% profit margin, and underperformance from its flagship Game Pass subscription service. To stabilize the unit and improve profitability, Sharma has initiated a series of aggressive restructuring actions. These include cutting 3,200 jobs—roughly 20% of Xbox's 14,000-person workforce—scaling back game production output, and refocusing capital on high-performing core franchises like Halo and Elder Scrolls. Additionally, Microsoft is expanding content licensing into television and film while competing directly with platforms like Roblox through user-generated content. Sharma has established ambitious targets for the division, expecting Xbox to achieve double-digit operating profit margins within the current fiscal year and ultimately reach 1 billion daily users across games and media. The drastic cost-cutting and strategic reset reflect Microsoft's urgent effort to extract stronger financial returns from its substantial multi-year investments in the gaming sector.