Key information
Asha Sharma, the head of Microsoft's video game division, reported in an internal meeting with employees that Xbox's first-party business has returned to growth after hitting historic lows. According to the report published by Jorge Cano on October 7, 2026, the company experienced severe drops in player hours, player counts, and revenues earlier in the year, describing the prior period as being in free fall.
Sharma stated that the business has begun to stabilize, with playing hours no longer declining and first-party titles now growing following several years of annual decreases. Current results are reportedly between two and three times higher than the previous historic minimums, supported by strong debuts from recent titles such as Gears of War: E-Day, Minecraft Dungeons 2, and World of Warcraft Forever. Additionally, brand perception for Xbox has increased by 30 percent over the past year.
This turnaround follows structural shifts including layoffs, internal reorganizations, and changes to Xbox Game Pass, alongside renewed emphasis on Xbox Series X/S hardware. Furthermore, Microsoft is currently developing its next-generation hardware family known internally as Xbox Helix, which will be anchored by a new console.
