According to the latest report from the technology media "The Information", Xbox is in urgent need of hit games and must speed up its launch pace. This is one of the core goals of new CEO Asha Sharma as he embarks on revamping the business. The report quoted three anonymous sources as saying that Phil Spencer's successor plans to eliminate underperforming studios and projects and devote more resources to the company's core IP series such as "Halo", "Fallout" and "The Elder Scrolls".
The report pointed out that the total game development budget for the entire Xbox product line in fiscal year 2027 will remain unchanged, but resources will be allocated from some business lines to accelerate the development progress of other projects. It has been five years since the release of "Halo: Infinite", and "Halo: Campaign Evolved" launched this year is only a remastered version of the single-player content of the first generation of the series. Meanwhile, The Elder Scrolls 6 still seems years away from release, and Fallout 5 is even later. Sharma is also said to be planning to increase investment in Minecraft, which currently lags behind Roblox in terms of development momentum.
"The Information" stated that Microsoft CEO Satya Nadella and CFO Amy Hood have approved Sharma's resource allocation plan for the next fiscal year (starting in July), but the two have not ruled out the possibility of a comprehensive restructuring of the game business. Restructuring directions include: turning Xbox into a wholly-owned subsidiary like LinkedIn and GitHub, establishing joint ventures with other companies, or selling the Xbox business as a whole.
How quickly Sharma's plan works will determine which path Microsoft ultimately chooses. But in the short term, this means massive layoffs at Xbox, which could affect many of the studios acquired during Phil Spencer's decade at the helm. In the past few years, Xbox has been diversifying its content in order to promote its Netflix-like subscription service. Sharma's recent internal memo and the latest report from "The Information" both show that Microsoft's game department may shrink its front line and return to its most stable profitable IP.
New games in the "Halo", "Forza Horizon" and "Fallout" series are all responsible for stable sales. The remake of "The Elder Scrolls 4" launched last year outperformed many new games released during the same period. However, accelerating the pace of game development at a time when development costs are soaring is a difficult problem, and it may take several years to find a feasible solution. Throughout this generation of console cycles, Microsoft has never been able to prove its ability to release games on time and with quality enough to stand out during the TGA Game Awards.
Earlier this week, Nadella told the "Hard Fork" podcast that Sharma would "take a fresh look at the business and make sure we live up to our players' expectations." He added: "We have to make this a sustainable business."