In a new statement, the XBOX CEO has revealed that their business today is “not healthy”.
For those living under a rock, XBOX has just announced the most significant restructuring in the company’s history, with 3200 employees laid off throughout FY27, including 1600 today. As a result, the company is undergoing a major reset, reworking its content portfolio, platform, and operations.
XBOX is Operating at Margins That Are 3–10x Lower than Comparable Platforms and Publishing Businesses
In a statement on X (formerly Twitter), Asha Sharma, the XBOX CEO, stated that their business is ‘not healthy’, with the company “operating at margins that are 3–10x lower than comparable platform and publishing businesses”. The statement adds that the company has entered Gen 9 with a smaller install base and a higher cost structure.
The statement adds that growth was dependent on Game Pass, multi-platform support, and a broader content portfolio, but while this did create meaningful value, growth didn’t keep pace with expectations. As a result, the team has observed the core business weakening and a need for more teams, investment, and time to achieve a better outcome. At the same time, the industry is facing “the most severe hardware crisis in history”.
- More Insider Gaming: Asha Sharma Confirms No Publicly Announced Game Cancellations Despite XBOX Layoffs
We were also informed that they have learned they are not “the best home for every type of studio.” And in a typical year, the company has lost 64 cents for every dollar that was invested. However, with the new changes, the team is aiming for the next decade of gaming to be larger, more global, and more creative than anything we’ve seen before. Asha adds, the company will “invest as much in XBOX as we ever have, but we’ll invest with greater focus, greater discipline, and greater clarity, all in service of making XBOX where the world plays and creates.”
What are your thoughts on XBOX’s business not being healthy? Leave your thoughts in the comments below, or join the discussion in the official Insider Gaming Discord.
For more information from Insider Gaming, read about Xbox shifting investment to focus on Activision, Bethesda, Blizzard and others. Don’t forget to sign up for our weekly newsletter.
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