Xbox is a disaster
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- Microsoft's gaming division spent over $20 billion on content, platform, and hardware subsidy over five years while annual revenue declined nearly half a billion dollars, per a "reset" memo from new Xbox CEO Asha Sharma and chief content officer Matt Booty.
- Game Pass plateaued at around 30 million subscribers, falling well short of Microsoft's 100-million-by-2030 target, undermining the subscription thesis that drove billions in acquisitions.
- Microsoft paid $68.7 billion for Activision Blizzard King — an acquisition Sharma's memo concedes failed to clarify what an Xbox actually is.
- Microsoft is reportedly considering closing at least five studios — including Arkane (Dishonored) and Double Fine Productions (Psychonauts) — with layoffs expected to start the following week.
- Ninja Theory is reportedly among the studios on the chopping block despite having just revealed a new game at Summer Game Fest days before the reset memo.
- Former Xbox boss Phil Spencer retired in February alongside Sarah Bond's departure, leaving new CEO Asha Sharma — previously head of CoreAI — to inherit a division the article describes as failing in hardware, subscriptions, and development simultaneously.
- Matthew Ball has joined as Xbox's new strategy officer and is working on the next console, currently codenamed "Project Helix."
Why it matters: Microsoft spent over $20 billion on Xbox over five years while annual revenue declined nearly half a billion dollars. Closures would target studios behind Dishonored and Psychonauts, and the piece notes Xbox's hardware, subscription, and development arms are all faltering simultaneously, raising the question of what an Xbox even is.
