It has been over half a year since Asha Sharma was made the Executive Vice President and CEO of Microsoft Gaming. Succeeding her predecessor, Phil Spencer, Sharma inherited the issues that came with the growth-centric methodology Spencer implemented while he was CEO of Microsoft Gaming.
After a rocky half-decade for the Microsoft Gaming Division, with declining console sales as well as a record low for Game Pass subscriptions, this article will look at the efforts Sharma has made to correct the course of Microsoft’s gaming division.
New Beginnings
Since the change from the XBOX division of Microsoft to Microsoft Gaming alongside the acquisition of Activision Blizzard back in January 2022, there has been a loss of the XBOX identity. Sharma, in interviews, expressed that she wanted to focus on the XBOX branding and the games that put the company in the good graces of fans in the first place.
In a newsletter on their official site, Microsoft posted “We Are XBOX” in April, a campaign message explaining Sharma’s goals to focus on content creator-driven games like Sea of Thieves, Minecraft, and The Elder Scrolls. These are video games that inspire streamers, modders, and the like to create content for and from their games. The tagline “We Are XBOX” walks back the previous message of the “This is an XBOX” campaign during the Spencer era.
The previous campaign’s primary objective was to push the cloud gaming model as their flagship product. The move to this campaign is an indicator that, while Game Pass will still be a core feature, a new focus on fan-favorite projects will be instituted. We have seen this focus on not only said creator-driven games like Sea of Thieves or Minecraft, but also on their exclusives making a return in the past 7 months.
Fan favorite series like Gears of War, Halo and Fallout that were placed on the back burner are now getting the spotlight. For Fallout especially, the studio Obsidian Entertainment(responsible for the cult favorite Fallout: New Vegas) has merged with the current developers, Bethesda Game Studios, for their newest Fallout project.
Alongside a focus on prioritizing fan-favorite series, one of Sharma’s first actions after becoming EVP and CEO was cutting the cost of Game Pass down from $29.99 a month to $22.99 a month in exchange for removing Call of Duty installments from being day-one releases. XBOX Chief Strategy Officer Matthew Ball reported that the price increase resulted in millions of lost players for Microsoft. Since the reduction took place in April 2026, it is too early to see if this change will bring back those lost numbers.
Sharma’s determination to bring more anticipated games to the forefront of the company does not stop at already-owned intellectual properties. On September 10th of this year, developer Hideo Kojima and Sony had a public falling out after Sony announced they were no longer planning to develop Kojima’s new military espionage game. Physint, a spiritual successor to the Metal Gear series, is a highly anticipated project from Kojima. After months of behind-the-scenes talks, Sharma and Kojima announced Physint would continue development with Microsoft Gaming backing the project.
Alongside this, there were talks of expanding their relationship beyond video games with film and TV projects. Not only is Sharma expanding relations with fan favorite developers, she is getting in touch with gamers directly. Despite her previous ties within Microsoft’s AI development as president, she has made moves to downsize the XBOX AI assistant, much to the praise of their general player base. In an interview with the Washington Post, Sharma revealed she has been setting aside hours within the month to help handle support tickets so she can get a better view of what gamers are having issues with. With these moves to bring back the series we love at lower prices, Sharma has earned some approval with gamers. However…
Shrinking Pains
Sharma’s tenure as CEO and EVP has not been without fault. As mentioned previously, her predecessor focused on expanding XBOX’s portfolio, so much so that XBOX has seen a decline in revenue. This trend has continued with Sharma. Despite increasing the price of the console, the lackluster returns of the Activision Blizzard acquisition, alongside outside forces like data centers and tariffs keeping console sales low, have created strain on the company.
In July 2026, Sharma enacted the largest corporate restructuring in the company’s history. This included a layoff of 20% of its staff—a total of 3200, half of those being on the day of the announcement. The reason for this, Microsoft claims, is that the structure of the company involved too many layers of management that stalled projects.
Alongside the mass layoffs, four studios that were under Microsoft’s ownership were divested. Compulsion Games, Double Fine Productions, and Undead Labs went independent with their IP rights retained. However, Ninja Theory has been shut down due to the downsizing efforts after multiple buyers have fallen through.
This restructuring is an ongoing endeavor. As of September 2026, their newest form of restructuring has involved merging studios and shuffling which subsidiaries can work on different IPs. The most notable case is that of Obsidian and Bethesda’s merger. Some companies have had their projects moved. Most notably, Activision has taken on Rare and World’s Edge. Alongside this, they have become the new developers of the Halo franchise following the continued downsizing of game studio 343 Industries.
The move to lay off so many staff members, half of whom at such short notice, caused friction between Microsoft and the Communications Workers of America (CWA). The CWA has taken legal action against the company for unlawfully firing its staff without proper notice or before discussing the decision with its unions.
It is not just the developers that have been in dire straits because of this action. Studio Double Fine’s owner Tim Schafer had this to say on the topic of his studio going independent again during a Bloomberg interview: “No one puts Double Fine out of business except for me. Asha’s not going to shoot my dog. I’m going to shoot it. But I’m not going to shoot it because it’s going to do great. A lot of people want to walk the dog.”
Morale within the XBOX studio has been lowered; it is not just ex-staff and ex-studios that are disgruntled. The decision has been the target of consumer backlash. Within the Microsoft feedback portal, one of the top trending posts during this time was “End studio closures and stop the cycle of layoffs.” This post garnered over four thousand upvotes and 1000. Gamers are tired of seeing their favorite studios cut loose and the staff that works hard on their games left out to dry.
Asha Sharma’s first seven months as CEO have been eventful and marked with significant change for the company. With efforts to change the identity of XBOX back to its heyday, there has been praise for how Sharma has handled public reception. However, the subsequent loss of employees and studios alike has left a dark spot that fans remain uneasy about. The future of XBOX is full of uncertainty, and only time will tell if the rocky start to this new management will reflect the coming years.
