Xbox Boss Asha Sharma Warns Company Will Not Survive Without New IP

Xbox CEO Asha Sharma warned employees during an internal town hall that the organisation will not survive if we only revive on the past, according to a transcript seen by Windows Central and reported by Eurogamer on October 14, 2026. The remarks come as Microsoft’s gaming division undergoes a massive corporate reset involving thousands of job cuts, studio closures, and a controversial shift in its publishing strategy following what Sharma described as an all-time low for the business.

Asha Sharma Warns Xbox Needs New IP to Survive

During the company-wide meeting, Sharma told staff that while Xbox remains committed to its heavy hitters, original games are vital to the platform’s long-term viability. Video Games Chronicle noted that Sharma stated the company is backing its strongest franchises to turn them into global billion-dollar properties, but cautioned that relying solely on legacy titles is a dead end. We have to find new ways, and courage, to have invention on new IP, that reaches new sets of audiences, Sharma reportedly told employees, according to Eurogamer.

That call for creative risk stands in sharp contrast to the division’s recent actions. Eurogamer pointed out that Microsoft has recently parted ways with studios such as Double Fine, Compulsion, and Arkane, while assigning inventive developers like Obsidian to established properties like Fallout. Aside from inXile’s upcoming Clockwork Revolution, upcoming releases featuring entirely new intellectual property remain scarce across the Xbox ecosystem.

Game Pass Strategy Sent Xbox Into Freefall

The push for fresh creative directions follows a tumultuous period for Microsoft’s subscription service. IGN reported that Sharma detailed how the previous Game Pass strategy sent Xbox’s balance sheet into a freefall, operating at profit margins three to ten times lower than comparable publishing businesses. Microsoft had initially hoped to reach up to 100 million subscribers by 2030, but current figures sit at roughly 30 million against expectations of 77 million for the year.

In response to those financial strains, leadership implemented sweeping cutbacks. IGN noted that Xbox has laid off nearly 2,000 staff members throughout the year as part of wider corporate restructuring, bringing estimated total losses across the division to roughly 3,200 jobs alongside the divestment of five studios. Sharma recently told Bloomberg that the company has managed to reset Game Pass after an eight-month decline, returning the service to growth and expanding player retention.

Project Helix and Future Hardware Plans

Amidst the software strategy shifts, Xbox is also planning its next-generation hardware footprint. Pure Xbox reported that Sharma revealed Project Helix will form the centerpiece of a broader family of devices for the tenth generation of consoles. While Microsoft will manufacture a traditional console first, Sharma indicated that other devices will cater to players on the go, with some systems built internally and others developed alongside external manufacturing partners.

To support ongoing hardware and software testing, Xbox announced the creation of Xbox Labs, a dedicated team of engineers, game makers, and scientists designed to trial emerging ideas and technology. An Xbox spokesperson told GamesIndustry.biz that the new unit has no explicit directive to implement artificial intelligence, utilizing it only when strictly necessary or beneficial. Meanwhile, a separate transmedia division named Xbox XP—led by Mojang Studios president Kayleen Walters—will oversee brand extensions including the Fallout television series and the upcoming Minecraft theme park.

Xbox Denies Rumours of Division Sale

Following her streamlining of the business this year, Sharma recently denied that the gaming division could be sold by Microsoft. However, in an interview with the New York Times, Sharma denied that any such plans exist, stating, Xbox is not for sale, and adding, We will do whatever it takes to set the company up for success, and we will look at the right partnerships, the right operating model and everything needed to achieve that.

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