Xbox CEO Asha Sharma and executive vice president Matt Booty publish staff memo ‘Next 100 Days: Xbox Reset’

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Xbox CEO Asha Sharma and Xbox executive vice president and chief content officer Matt Booty have published a memo sent to Xbox staff today, discussing the company’s first 100 days under new leadership, the challenges facing the Xbox business, and its plans to “reset for a stronger Xbox.”

The recent memo reveals a concerning situation. Even with over $20 billion invested in the last five years – not including Activision Blizzard King – the company’s main revenue is down. Projections indicate a profit margin of around three percent by the end of June, which could mean major changes are needed.

According to Bloomberg’s Jason Schreier, Xbox is preparing for significant layoffs soon after the end of its current financial year. Sources say the company is also planning to reduce spending in areas like marketing.

Get the full message from Sharma and Booty below.

Team,

Over the first 100 days together, we have started to revive XBOX.

Over the past 100 days, our teams have released more updates than they did in the entire previous year. We also have a record number of active partners on Xbox. After addressing some issues, our Game Pass service is now growing again after a period of decline lasting over eight months. Plus, through our Player Voice program, we’re constantly getting direct feedback from players, creators, and developers.

With the XBOX Games Showcase and the return of FanFest, we brought together hundreds of millions of fans globally. We reintroduced exclusives with Gears of War: E-Day in 2026 and Clockwork Revolution in 2027. Players can continue to expect signature exclusives from us every year. In parallel, Playground Games reminded us that established franchises can achieve incredible new highs.

Although it’s still early days, these results show what we can achieve by working quickly, staying connected with our community, and focusing on a common goal. We’ll inevitably make errors along the way, but the important thing is to listen to feedback, learn from our experiences, and make changes when necessary. Let’s not forget that our supporters are behind us and want to see us succeed.

We’re now beginning the next 100 days, and it’s crucial to be both hopeful and practical as we work to turn things around.

Here are the realities that we need to navigate:

Each year, over a billion people play Xbox games for a combined total of 72 billion hours on consoles, PCs, mobile devices, and through streaming services (not including significant numbers in China and a few other areas). Our popular game franchises are also achieving record success in television and film. Looking ahead, our biggest challenge isn’t other gaming companies – it’s capturing people’s attention. There are more options for entertainment than ever before, including games, TV shows, movies, creators, and apps.

We expect to finish the current financial year with an accountability margin of around 3%, which is lower than last year. Over the past five years, we’ve invested more than $20 billion in our content, platform, and hardware, but our yearly revenue has decreased by almost $500 million. This trend isn’t sustainable, and we need to change course.

#3: We are in a hardware component crisis. When I joined as CEO in February, the price we paid for console storage components was over 2x as high as we paid last fall. These costs have since doubled again. And as we plan for the 2027 holiday season, we expect another significant increase, taking us over 5x the prices we paid only two years earlier. Memory costs have followed a broadly similar trajectory. While the entire industry is facing a components crisis, we believe we have been impacted more greatly than many of our peers due to the choices we made over the last half decade. We are currently unable to make as many consoles as players want to buy, and we need a new business model and partnerships for hardware as we remain committed to Helix.

We grew our game development capacity to create enough content for our various platforms, including subscriptions, streaming, and devices. However, this expansion stretched us thin as we tried to adapt to shifting strategies in a market with increasing competition. We own incredibly popular and in-demand franchises, but haven’t invested enough to ensure they stay competitive. As demonstrated at our recent showcase, consistently releasing exclusive games – both our own and from other developers – and creating new game series are vital for our future. We need to re-evaluate how we balance these needs and where we invest over the next five years.

Our current technology setup isn’t strong enough to support our future goals. It’s become too complicated with many interconnected parts, slowing us down. We depend too much on outside companies to keep things running and need to build a more independent engineering team to prepare for what’s next. We need to deliver more value to players, and do it faster. In the future, we’ll be updating and rebuilding our core technologies, and exploring resources across Xbox and potential partnerships to help us succeed in all areas – on consoles, PCs, mobile devices, and streaming.

Some of this information might be unexpected, and even a little discouraging. But we won’t improve by avoiding difficult truths, or by continuing to do things the same way and hoping for different outcomes. Building on the momentum of our first 100 days, we’ll work quickly and collaboratively to make significant progress across all areas – from the physical products to the content, user experience, and services we offer.

Xbox is more than just a gaming console; it’s a place where people connect, share experiences, and make lasting memories. We have a strong foundation for creating these moments, with Xbox consoles at the heart of it all, the vast reach of Windows as a gaming platform, and a huge library of games from one of the world’s biggest game publishers.

Let’s reset for a stronger XBOX and build the #1 gaming and entertainment company.

Asha and Matt

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2026-06-11 02:32