Fresh off a Games Showcase weekend spent winning fans back, XBOX is getting surprisingly candid concerning the state of its business. CEO Asha Sharma and chief content officer Matt Booty published a memo titled Next 100 Days: XBOX Reset to XBOX Wire today, a message the corporate says was just sent to Team XBOX employees globally. It lays out five realities the corporate must navigate, and a number of the numbers are rough.
The primary half of the memo recaps Sharma’s first 100 days since taking on from Phil Spencer in February. The pair say XBOX has shipped more platform updates previously 100 days than within the prior 12 months combined, that Game Pass has returned to growth after greater than eight months of decline, and that the corporate now has more lively partners than ever, together with a 24/7 Player Voice channel for hearing directly from players. In addition they point to the Games Showcase and the return of FanFest, plus the reintroduction of exclusives with Gears of War: E-Day in 2026 and Clockwork Revolution in 2027, promising signature exclusives yearly going forward. Playground Games also gets a shoutout for proving established franchises can hit “incredible latest highs,” a transparent nod to Forza Horizon 6, which I said got here rattling near being the right racing game for me in my review.
From there, the memo shifts into the realities leadership says it must confront, and the numbers don’t lie. XBOX expects to finish this fiscal 12 months at a couple of 3 percent accountability margin, down 12 months over 12 months. Excluding Activision Blizzard King, the corporate has spent over $20 billion on content, platform, and hardware subsidies over the past five years while annual revenue declined by nearly half a billion. “Going forward, this cannot proceed,” the memo states.
The hardware section is where the memo gets most specific about just how much trouble XBOX is navigating. When Sharma joined in February, XBOX was paying over twice as much for console storage components because it had last fall. Those costs have since doubled again, and because the company plans for the 2027 holiday season, it expects to be paying over five times the costs of just two years earlier, with memory costs following an identical trajectory. XBOX admits it currently cannot construct as many consoles as players need to buy and says it needs a brand new business model and partnerships for hardware, while remaining committed to Project Helix, the codename for its next generation console.
The remaining realities cover an overextended studio system and platform infrastructure that leadership admits isn’t built for the battle ahead. The memo concedes XBOX has not adequately funded its industry-defining franchises to compete and win, that its systems span lots of of dependencies and lean too heavily on vendors, and that the corporate will have a look at potential M&A to assist it win across hardware, PC, mobile, and streaming. Sharma and Booty acknowledge these realities might be surprising and even frustrating for some employees to find, but argue XBOX won’t succeed by hiding hard truths. After a weekend of crowd-pleasing announcements, the harder part starts now.