Microsoft Xbox CEO Asha Sharma revealed that the gaming division experienced a significant decline in player count, engagement, and revenue in early 2026. Following internal restructuring, the company reports that first-party game growth has increased by two to three times compared to its lowest point.
The brand's favorability has risen by approximately 30% over the past year, supported by strong performances from titles such as Gears of War: E-Day, Minecraft Dungeons II, and World of Warcraft Forever. Sharma introduced a four-pillar strategy focusing on core hardware, content, creation, and connectivity.
The company is planning for the tenth generation of Xbox hardware, which will consist of a series of devices rather than a single model. The strategy includes expanding Xbox Cloud Gaming, disc-to-digital initiatives, and Xbox Play Anywhere, alongside more flexible subscription options for Game Pass.
Regarding the PC segment, Battle.net maintains user retention rates comparable to Steam. Microsoft intends to expand this platform through partnerships with companies like CD Projekt RED, while maintaining a curated approach distinct from other PC storefronts.
To support developers, Microsoft is simplifying its API and development goals to streamline the release process across Xbox Series S|X, Helix, and PC platforms. This initiative aims to address long-standing complaints regarding the complexity of porting and publishing games on Xbox hardware.
