It has been three months since Asha Sharma was thrust into the limelight as CEO of Xbox. Her non-gaming background initially confused the public and industry analysts, but her recent moves have started turning public perception around. On her three-month anniversary, we thought it would be interesting to take a look at Asha’s appointment, her actions since, and the moves that she’ll need to make to arrest Xbox’s decline.

First things first, let’s take a look at the state of Microsoft’s gaming business. The chart below shows revenue for the Gaming segment, including Xbox hardware, first- and third-party titles, and Game Pass revenue.

At first glance, it’s a pretty nice chart. However, the acquisition of Zenimax Media in 2021 and Activision Blizzard in 2024 obfuscates a declining growth trend. Those acquisitions, along with making Call of Duty a Game Pass day-one title were meant to supercharge Game Pass growth, but that has not materialized.

While official subscriber counts have been growing steadily since Game Pass launched in 2017 (34M Game Pass subscribers according to the last official announcement in 2024), GameDiscoverCo pointed out that Xbox was performing a sleight of hand with the renaming of Xbox Live Gold to Game Pass Core and counting those as Game Pass subscribers even while actual total console subscribers remained stagnant. The chart above from SuperJoost shows a declining rate of weekly subscribers through 2024 and 2025, with spikes correlating with tentpole releases.

Considering that there are more than 900M PC and 629M console players (per Newzoo’s 2026 PC & Console report), 34M subscribers is a tiny fraction of that player base and one-tenth of the subscriber base of Netflix. It may be that subscriptions are not competitive at scale in games. Neither Apple nor Netflix has been able to make the model work at scale, and Microsoft does not appear to have solved it either.

That’s the situation Asha stepped into, and her outsider status led her to make a series of early, PR-friendly moves to address skepticism around her appointment:

• February 2026: Asha Sharma named EVP and CEO, Microsoft Gaming; promotes Matt Booty to Chief Creative Officer.
• March 2026: Asha announces Project Helix, which is not a Sharma initiative given the timing.
• April 2026: The memo: Asha returns the brand identity back to Xbox instead of the corporate sounding Microsoft Gaming.
• April 2026: Game Pass price reduction, Call of Duty removed as day-one release.
• May 2026: Reveals a new Xbox bootup sequence, including a throwback to the original green neon Xbox logo.
• May 2026: Brings exec team from her previous roles in Microsoft’s CoreAI group and Instacart into Xbox. None have a gaming background. She also hires Matthew Ball (of Epyllion fame) as Chief Strategy Officer and Scott Van Vliet as Chief Technology Officer.

Many of these are certainly crowd-pleasing and common sense moves (COD as a Game Pass day-one title really didn’t go the way they hoped) but nothing really transformative. Moving forward, what could we expect from Xbox?

Sharma’s memo highlighted four key areas that they would focus on:

• Hardware Strategy: Develop Project Helix as a high-performance bridge between console and PC gaming — essentially a machine with PC guts and an Xbox interface that allows players to access both ecosystems.
• Content Strategy: Create a predictable, high-quality slate of major franchises that expands into mobile-first markets and empowers creator-driven communities.
• Experience Strategy: Overhaul search, social, and discovery tools to make the platform less fragmented for both players and developers.
• Services Strategy: Make Game Pass sustainable, improving cloud performance and making acquisitions move faster.

We can see both good and some questionable ideas being put to play. Let’s break them down.

• Project Helix: It’s unlikely to move the needle. Even if drastic moves are made, like making it an open platform so you can install other third-party marketplaces, it feels like we’re going back to Xbox One’s “one-stop shop for your entertainment,” which was a clear swing and miss. It’s also very similar to the Steam Machine, and like it, is expected to have a premium price point which will limit sales. Additionally, if nothing else changes regarding game exclusivity, there’s no real motivation for players to pick up an expensive PC-Console hybrid when they can play the same games elsewhere.
• Content Strategy: Amidst studio shutdowns and layoffs across Xbox, can it even execute this strategy? On one hand, Xbox has a treasure trove of powerhouse IPs. On the other hand, it has managed to kill one of the best ones (see chart below).

• Game Pass Revamp: It’s clearly needed. But the “Netflix for Games” concept hasn’t worked, even when adding blockbuster IPs. The team needs to rethink what Game Pass is from the ground up and its role in the Xbox ecosystem.
• New Exec Team: With a VP Product, VP Design, Head of Growth, and GM from CoreAI and a Director of Product and Growth from Instacart, this new team is not exactly a gaming brain trust. However, we’ll give them the benefit of the doubt for now. Strauss Zelnick, Reggie Fils-Aimé, and Peter Moore are just some names that came outside of games and had a major positive impact.

Still, the elephant in the room hasn’t been addressed. Can Xbox have its cake and eat it too? Can it fight on two fronts — hardware and services — and win? To succeed in hardware requires compelling exclusives. To maximize success in content and services means getting your games out wherever you can. They are diametrically opposed, and the middle-of-the-road strategy has so far seen Xbox completely losing the console wars for an “almost” $5B ARR in Game Pass. 

Something big will need to change, but what could Xbox do? We see two paths.

Double Down on Xbox

One option is to make Xbox a must-have console again with timed and platform exclusives. If you could only play the next Halo, Fable, Overwatch, or Diablo on Xbox, the hardware has true differentiation.

However, the console market is hitting a saturation point. According to Newzoo’s 2026 PC & Console report, PC (already a bigger market by player count) is expected to grow faster than console over the next three years.

Not only that, but playtime has declined on consoles and increased for PC.

If we use playtime as a proxy for the player base for console, we see that Xbox’s share has shrunk from being 63% of PlayStation’s in 2022 to 53% in 2025. It is a 10 percentage point reduction over three years. That smaller player base means that the market for Xbox exclusives is smaller than it used to be; it would be like squeezing water from a stone.

The final nail in the coffin for this strategy is that the juicy IP from Activision is now making more money on PC than console. A fight for hardware supremacy will be like laying siege on a well-fortified PlayStation castle during a famine.

Focus On Publishing

The second option is to drop hardware (or let it slowly fade away) and focus on becoming the biggest games publisher in the world (title currently held by Tencent, which made $35B in games revenue in FY 2025 — $24B in China and over $10B internationally). Xbox has the IP, the studios, and, in Matt Booty, a game industry veteran who led the first party content organization.

On the other hand, the various layoffs, studio shutdowns, and cancelled games give pause on how well it could execute this. Taking a positive view, we might say that pruning was necessary. The list of canceled and shut down games doesn’t look particularly compelling: Mighty Doom and Warcraft Rumble (poor performing mobile titles), a Perfect Dark reboot (the last installment was released in 2005), Everwild (a game that Rare had been working on for 10 years with nothing to show), Redfall (50 Metacritic score), and the list goes on. In fact, maybe Xbox had been too generous and patient with its studios. Besides Everwild, the Perfect Dark reboot also had a seven-year development period before it got cancelled. 

Decluttering can then help the company focus on its true strength, its wealth of beloved IP, including Minecraft. While the hype train is with Roblox now, real-world interest in Minecraft is on par, and in some cases, even exceeds Roblox.

Minecraft has an impressive 155M MAU across all platforms. Putting that into context, Roblox has a DAU of 151M! There’s massive potential for growing Minecraft, and the first unlock will have to be making it free-to-play. Then open up scripting in Bedrock — which Mojang should prioritize because of its much wider reach — so creators can build more varied experiences and monetize them. However, there still needs to be a strong curation side to avoid it becoming the wild west Roblox is. Minecraft has a reputation among parents as the “safe and good” game compared to Roblox, a differentiation that Mojang would be wise to maintain (though Roblox’s recent moves with its age-gating may change this).

There's also expanding further into mobile from an M&A standpoint. Xbox has made huge strides with this in the form of the Activision Blizzard acquisition (with King / Candy Crush), but this should just be the beginning.

With King, it acquired a publisher that hasn't released a hit game in 10 years.

Microsoft could also focus on the small, scrappy, cost-effective, and fast-moving studios from Vietnam, Turkey, China, Hong Kong, and Singapore (many Chinese-based studios are headquartered there). Let these studios do what they do best — keep grinding away at new prototypes and games until they find a hit, then potentially even reskin it with one of Microsoft’s powerhouse IPs.

The Likely Move

For now, the signs are that Xbox will continue along its middle-of-the-road strategy. In Sharma’s memo, she wrote that “Console is at the foundation, delivering a premium experience, and cloud brings that experience to any device” and that Xbox would “fortify Game Pass with clear differentiation and sustainable economics.” Perhaps Xbox tries launching Project Helix at a competitive price point or Game Pass reduces its cost and focuses on more indie/AA games. Nevertheless, none of these iterative moves are meaningful enough to turn the ship in a major way.

Asha Sharma has successfully navigated the "outsider" phase by focusing on common-sense improvements, but the big questions remain. Xbox looks poised to continue fighting on two fronts – being a hardware manufacturer and bringing more of its games everywhere – which we feel is a mistake. Hopefully that changes and new hires like Matthew Ball can help redirect internal focus.

At this point, Xbox has lost the console war, and it’s too late to return to victory on that front without major losses. We believe its best bet is to double down on being a multi-platform games publisher first and foremost. If so, should Xbox remain under Microsoft if the company’s broader priorities ultimately conflict with that vision? Perhaps not.

Either way, Microsoft leaving the hardware space will create a huge void and leave the industry without console competition, something that will negatively impact the overall industry. But it’s a future that looks increasingly likely, even if Xbox hasn’t accepted it yet.

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In Other News

💸 Funding & Acquisitions:

• US-based gaming holding GreaterThan Group (GTG) has raised $100M to co-own and fund elite creative game studios.
• Decart Raises $300M: Tech Leaders Back the Company as Both Customers and Investors.
• Canada-based iGaming content and game tech company Bragg Gaming has entered into a binding term sheet to acquire Drayton International, a diversified iGaming technology and content platform, for $9M.
• South Korea-based cross-media content IP company Macovill has secured a follow-on investment of an undisclosed sum.

📊 Business & Products:

• Ubisoft reports $482M in FYQ4 net bookings, down 54% from a year ago but above expectations.
• Terraria mobile sales approach 20M as game surpasses 70M copies sold.
• Former Embracer CEO says Fellowship Entertainment spin-off is the "most effective long-term solution".
• Fortnite returns to iOS worldwide, excluding Australia, as Epic prepares for "final battle" over App Store fees.
• Sony won't be bringing any more single-player games to PC, says PlayStation Studios boss.
• Xsolla partners with Skich to support alternative mobile game distribution.

👾 Miscellaneous:

• Subnautica 2 surpasses 2M copies sold in first 12 hours of early access.
• Savvy Games Group wraps Saudi 'Play to Learn' competition with 719K students involved.
• Gamecity Hamburg awards up to €80K to five games in latest Prototype Funding Round.
• Valve overhauls tag system on Steam to improve game discoverability.
• Nex Playground available for pre-order in UK and Ireland at £269.

Content Worth Consuming

Pokémon Go 2 Isn't on the Cards, but Niantic Has Big Plans Under New Owner Scopely (gamesindustry.biz): “Don't expect Pokémon Go 2 any time soon. ‘I think that doing a sequel within a franchise is pretty clearly not the correct thing to do,’ says Ed Wu, Scopely's president of games and former SVP of Pokémon Go at Niantic. ‘There's such a big community because of the way that our games can be a part of folks's lives wherever they go, however they explore the world. Creating a sequel that divides the community doesn't make as much sense. If and when we do something new, it will really have to be from a different angle, but still with this notion of inspiring people to explore the world together.’”

Funding and Founding (Gamecraft): “Blake and Mitch discuss the current environment for funding games and some of the challenges and opportunities for founders in the games space. They begin with a short survey of the current venture capital environment and the difficulties presented by industry consolidation, which has taken several of the important buyers out of the market. They also look at the pivots of some of the major game-specific venture funds, and how their investment strategies are changing to meet the current moment.”

Playable Trends April 2026: Puzzle Format, Long Sessions, Recognizable Mechanics (two & a half gamers): “Long-form playables aren't just back — they're crushing it. The top playable in April hit 75% impression share. Whiteout Survival is doing it with 3 new playables a month. And the format that's winning everywhere is the one your mum would recognize. Matej Lančarič is joined by Ondrej Monsberger and John Wright for another Playable Trends deep-dive. The crew goes through Sensor Tower's top playable creatives for April, focusing exclusively on long-form playables and what's actually driving impression share right now. The conversation covers the production trick of building one playable script and shipping 20 variations, why the "mum test" puzzle format is dominating, the BitLife "find the shoes" frustration mechanic, Royal Match's redirect-then-return experiment, and the awkward truth that Whiteout Survival made only three new playables in April but still has 99% impression share on puzzle creatives.”

The D&D Company Is Spending $1B Making Video Games, and None of Them Are Games-as-a-Service (The Game Business): “We are joined by Hasbro CEO Chris Cocks, who is overseeing a $1 billion investment into video games, including the development of major new D&D titles. In 2027, it will release ambitious sci-fi RPG Exodus and D&D action adventure Warlock. But it also has a successful licensing business, which in recent years has led to the likes of Baldur's Gate 3 and Monopoly Go. We speak to Cocks about its huge investment in games, why none of its first-party titles are live service projects, moving development outside of the US, how it is using AI... and Scooby Doo.”

MOUSE: P.I. For Hire — Creating a Rubber Hose Noir Detective Story (The AIAS Game Maker’s Notebook): “Adam Orth chats with Mateusz Michalak (CEO & Co-Founder) & Mateusz Lechowski (Narrative Director) from Fumi Games about their studio debut title, MOUSE: P.I. For Hire. Together they discuss the origins of the studio being based around animation with no game dev experience; the inspirations and development of MOUSE: P.I. For Hire; developing the rubber-hose animation and it's importance to the setting; how the black and white art style made it difficult to find a publisher; the pre-World War II setting and parallels to modern conflicts; and balancing the serious and comedic elements within the narrative.”

Inside Scopely's Rise to a Global Mobile Games Giant (pocketgamer.biz): “Mobile games giant Scopely enters its 15th year in a very different position from the small Los Angeles startup founded back in 2011. Today, the company operates across more than 30 countries with thousands of employees under its banner. Its portfolio spans major brands from Monopoly Go to Star Trek Fleet Command and Pokémon Go, reaching millions of players each year and amassing more than 150 billion hours played. The 15th-year milestone arrives after a busy time for the studio, during which major acquisitions and record-breaking performances have taken place.”

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