Speaking at an internal town hall meeting, Xbox Chief Executive Officer Asha Sharma issued a blunt warning to employees, stating that Microsoft’s gaming division will not survive if it relies exclusively on legacy intellectual properties. The internal presentation, confirmed via transcripts obtained by Windows Central, outlined Sharma’s vision for turning around the gaming giant following a massive structural reset. While affirming heavy ongoing investments in tentpole franchises like Call of Duty, Fallout, and World of Warcraft, the CEO emphasized that creating original, enduring IPs remains essential for long-term viability.
What Did Asha Sharma Say About the Future of Xbox Franchises and New IP?
Taking over leadership of Microsoft’s gaming business in February following the departure of longtime head Phil Spencer, Asha Sharma addressed the balance between foundational blockbusters and original creative risks. According to verified town hall transcripts, the CEO underscored that while established franchises build billion-dollar foundations, creative stagnation poses an existential threat.
“We are backing our strongest franchises. I want our great games to become great global billion-dollar franchises. I would also like to see us continue to create enduring new IP. We will not survive if we only revive on the past. We have to find new ways, and courage, to have invention on new IP, that reaches new sets of audiences.”
— Asha Sharma, Chief Executive Officer of Xbox
Sharma also addressed challenges in the casual gaming sector, acknowledging that competitors like Monopoly Go and Block Blast have captured market share from King’s flagship Candy Crush.
How Has the FY27 Restructuring Reshaped Xbox Studios?
The town hall follows what Sharma previously described as the largest organizational reset in Xbox’s 25-year history. Initiated on July 6 through a division-wide memo, Microsoft announced plans to eliminate approximately 3,200 positions across FY27 to address low profit margins and high hardware cost structures. Internal metrics revealed that select Xbox Game Studios projects were losing 64 cents for every dollar invested.
The restructuring triggered immediate changes across Microsoft’s developer portfolio:
- Studio Independence: Compulsion Games (South of Midnight) and Double Fine (Psychonauts), led by Tim Schafer, separated from Microsoft to regain independent status.
- Divestment Targets: Undead Labs (State of Decay) and Ninja Theory (Hellblade) were placed up for sale.
- Internal Reorganization: Management consolidated internal resources by placing the Halo franchise and Rare’s Sea of Thieves directly under the Activision publishing umbrella.
Despite the heavy organizational shifts, Sharma signaled to employees that Xbox has begun returning to growth following a historic operational low, pointing to positive early momentum for upcoming blockbusters including Gears of War: E-Day, Minecraft Dungeons 2, and World of Warcraft: Forever.
Gamers and industry observers can keep track of official developer announcements and ecosystem updates directly through the Xbox News Portal.
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