Following recent mass layoffs across Xbox, and Microsoft revealing through its earnings report that the division saw a 10 percent dip in revenue in the last quarter, CEO Asha Sharma has reportedly sent out a memo to employees to spell out the future of the company. According to The Verge, Sharma outlined four main priorities for Xbox in the new fiscal year: strengthen the platform leading with console, growing games into global franchises, turning Minecraft into a popular “creator platform”, and “extend the worlds that fans love”.
These four priorities are labelled as the “four Cs”: “core”, “content”, “creation”, and “connection”, respectively. Each one has three “stages” through which progress and success will be measured. The first stage involves returning Xbox to growth over the course of the fiscal year.
“In FY28 and FY29, our Four C’s and roadmap must move into businesses producing meaningful player value and revenue acceleration,” she reportedly said in the memo. The third stage will be to “scale what works”, with plans for fiscal year 2030 being “to be halfway to our long-term daily-player goal with sustained double-digit growth in players and engagement and industry-leading margins.”
“Xbox is one of the largest stadiums in the world, bringing together more than 100 million people every day, more than 500 million each month, and nearly one billion each year,” she further wrote, before also talking about how the Xbox console serves as the division’s “flagship experience”.
On the management side of things, Sharma wrote in the memo that there is a plan to switch away from Xbox’s traditional decentralized system for its studios into something “more focused around our strongest franchises and biggest new ideas.” Plans are also being developed for its big franchises “across film, television, consumer products, sponsorship, live experiences, and form new partnerships globally, including China.” Without going into further detail, Sharma also said that three of the company’s franchises “already generate more than $1 billion annually”.
Shortly after Microsoft’s recent earnings report, company CEO Satya Nadella spoke about the decisions that have been made regarding Xbox in recent times, and said that the plan is to “reset the business for long-term growth.”
“When it comes to Xbox, we are making the necessary decisions required across our content portfolio, platform, and operations to reset the business for long-term growth. We have the best IP in the industry and talented studios around the world, and believe we can bring these trends together and expect to return the business to growth in fiscal 2027.”
As for how the company has been doing, Microsoft revealed that it saw an overall growth of 18 percent year-on-year, amounting to roughly $90 billion. While Xbox and Windows saw revenues falling year-on-year, Nadella praised the Azure division for hitting a major milestone by generating over $100 billion in revenue. He also noted that Microsoft 365 Copilot has been seeing growth in its user base, having recently passed 30 million paid users.
The beginning of the month was marked by around 1,600 jobs being cut across Xbox, with Sharma confirming that 1,600 more cuts are planned.
