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Xbox Game Studios is undergoing a significant restructuring under CEO Asha Sharma, having already cut 1,868 jobs. Plans include three additional layoff rounds scheduled for October, November, and January as part of a broader reduction of 3,200 positions. Sharma previously stated that the business is not healthy, citing margins 3-10x lower than competitors and a need to reset the division.
The company has divested from several studios, including Double Fine, Ninja Theory, Arkane Studios, Compulsion Games, and Undead Labs. While some regained independence, Ninja Theory and Arkane face potential closure. Internal operations have also shifted, with Halo development moving under Activision and Obsidian Entertainment now reporting to Bethesda leadership.
Despite speculation regarding a potential sale, Microsoft commercial business CEO Jason Althoff dismissed rumors of an Xbox spinoff, affirming confidence in Sharma’s leadership. Microsoft maintains that the division is not for sale.
Looking ahead, Microsoft reportedly plans to release a next-generation handheld device in 2027, followed by a new console, Project Helix, in 2028. Reports suggest Project Helix could cost as much as $1,800, reflecting a high-cost trajectory for future hardware.
