Asha Sharma marked the end of her first hundred days as Xbox chief executive with a blog entry that framed the next hundred days as a "reset" for the division. In that post she pointed to a thin "accountability margin," slipping revenue streams, and broader industry pressures such as the global hardware component shortage.
The language was unmistakable: references to being "over‑extended" and confronting "hard truths" are typically the prelude to significant workforce reductions. Since then, Sharma's second hundred‑day milestone has passed, and the promised reset has manifested as a wave of layoffs that has swept through Xbox's studios and corporate units. Hundreds of employees have been let go, entire studios have been shuttered or placed on the market, and the overall atmosphere feels harsher than the usual cyclical cuts that have become almost routine in the games sector. A true "reset" is supposed to be a single, decisive button press: a painful but finite disruption that ultimately yields a more stable, predictable environment for the survivors.
What we are witnessing at Xbox, however, is the opposite. Certainty and stability are still elusive, and the process feels endless.
Just this week another 268 positions were eliminated, adding to the roughly 1,600 jobs already cut. The studio roster was reshuffled again, with Ninja Theory still without a buyer and likely facing closure, while the future of Arkane—another studio slated for divestiture—remains uncertain.
The original target announced in the summer was to eliminate about 3,200 jobs. Even after the latest round of cuts, the company is still short of that figure, indicating that more layoffs are inevitable before the goal is met. The "hundred‑day" label was essentially a catchy headline for a blog post; in practice, no one seems to know when the reset will finally end, nor how long Xbox staff will have to work under the looming threat of redundancy. Compounding the confusion is the absence of a clear post‑reset vision.
Recent restructuring moves have placed Obsidian under the Bethesda umbrella and handed the Halo franchise to Activision, effectively making Activision the new steward of one of Xbox's most iconic properties. Rare, another historic Microsoft acquisition, has also been folded into the Activision structure. In short, flagship studios and prized intellectual properties are being shifted away from Xbox Game Studios and into the larger publishing entities Microsoft acquired to bolster the console business. It is unclear how this aligns with earlier statements that the reset would strip away layers of management to give development teams more direct oversight.
The reality appears more like a reallocation of valuable assets to larger, more financially robust divisions. Some observers have suggested—half‑in‑jest, half‑serious—that the scale of the Activision Blizzard acquisition could eventually amount to an "Activision takeover of Xbox" rather than the other way around.
The fact that Halo, the crown jewel of the Xbox brand since the original console, now sits under Activision's purview while its dedicated internal studio is being gutted, fuels that speculation. From a financial perspective, moving Microsoft's most valuable studios and IP into the Activision and Bethesda units could be a way to cushion future impairment charges. Microsoft bought Activision Blizzard at a valuation peak, and by reorganising assets to bolster that balance‑sheet line item, the company may be trying to soften the blow for investors when the true value of those acquisitions is later written down.
A more conspiratorial reading might argue that Microsoft is positioning itself to eventually exit the games business without taking a catastrophic loss. With the console hardware market under pressure from soaring component costs, a full‑scale sale of Xbox seems improbable. However, selling Activision Blizzard and Bethesda at a respectable price could provide an exit route, and moving the most lucrative franchises into those units would make them more attractive to potential buyers.
I remain skeptical of that scenario. My assessment of Microsoft's willingness to abandon its games division has not changed; the company would likely find it humiliating to write off tens of billions of dollars and be seen as exiting a major consumer market.
Moreover, a buyer willing to pay a premium for Activision Blizzard—especially with Halo included as a sweetener—seems unlikely in the current climate. The restructuring also leaves several key studios still under Xbox Game Studios: a lean version of Halo Studios now serves as a support team for Activision's Halo titles, while the Forza franchise continues under the merged Playground Games and Turn 10, Gears of War remains with The Coalition, and InXile Entertainment (Clockwork Revolution) stays put. If the goal is to move development oversight away from Xbox Game Studios into the Bethesda and Activision structures, the exclusion of these studios raises questions about the consistency of the plan. Perhaps Microsoft is simply reluctant to pull the band‑aid off all at once, preferring a more gradual approach.
Mojang, the creator of Minecraft, also sits in a gray area. It remains directly under the Xbox umbrella, yet its future strategy is opaque.
Microsoft clearly sees Minecraft as a cash‑cow, but how it will be integrated with the rest of the Xbox portfolio is still unclear. Adding to the bewilderment is the recent acquisition of publishing rights for Hideo Kojima's upcoming title, Physint. Xbox Game Studios moved quickly to secure the deal after Sony withdrew, committing Microsoft to a high‑budget project that likely will not launch until 2030 or later.
In isolation, backing a Kojima game could be a masterstroke, and entrusting Halo to Activision—an organization experienced with first‑person shooters—might make sense. Yet when taken together, these disparate moves lack a unifying strategic narrative. The result is a feeling that Xbox is operating without a coherent roadmap.
Like Sony, Microsoft will soon have to announce its next‑generation console and price point, a revelation that will only succeed if it is backed by a clear, compelling vision of what the hardware will deliver. Without a solid, well‑communicated strategy, convincing consumers to invest in a potentially $1,000+ system will be an uphill battle. At present, the ongoing reset feels interminable, and the absence of a concrete, long‑term plan leaves both employees and fans in limbo.
Until the restructuring finally concludes and a credible strategic direction emerges, Xbox's future remains uncertain.