Exploring Xbox’s Comeback

Two weeks ago, excitement filled the air at Microsoft’s studio D building as hundreds of Xbox employees gathered early on a Thursday morning to hear from Xbox CEO Asha Sharma. The walls were adorned with the slogan “return of Xbox,” a message Sharma first shared with the team back in February. It was time for her to rally the troops after a challenging two years and provide a glimpse into the future of Xbox.

During a 40-minute all-hands meeting, Sharma presented a four-point action plan for Xbox, addressing key areas: hardware, games, platform, and services. “We have to be honest about where we are. We’ve got work to do,” she acknowledged. “Players are frustrated with us; they feel like we haven’t updated our console enough, and our PC presence isn’t strong enough.”

The solution to these frustrations is what many Xbox employees and fans have been eagerly anticipating: a renewed commitment to improving the experience for the current Xbox audience. “We’re going to start by restoring our core. We have to fix the fundamentals on console and PC. We need to focus on every detail to enhance the fun and simplify the experience,” Sharma emphasized.

In the past, Microsoft regularly rolled out exciting new Xbox features each month, but that pace has slowed significantly over the last year. In early March, Sharma began directing Xbox engineering teams to prioritize highly requested console features, aiming to make a positive impact and win back fans. During the all-hands meeting, she went further, promising biweekly console updates through the end of the year.

The atmosphere of the meeting resembled a coach rallying a sports team, according to Xbox employees. Sharma also announced a shift back to the Xbox branding, dropping the Microsoft Gaming name, a change that has been well-received internally.

Sharma briefly touched on another concern for Xbox fans: exclusivity. Over two years ago, Microsoft announced that four Xbox-exclusive games would also be available on PS5 and Nintendo Switch as part of an initiative called Project Latitude, aimed at expanding Microsoft’s gaming revenue beyond Xbox consoles. This move has frustrated hardcore Xbox fans, and clarity on the number of games releasing on PS5 has been lacking.

“We will reevaluate our approach to exclusivity,” Sharma stated. Sources indicate she is exploring various options for Xbox exclusive games but is proceeding cautiously and isn’t ready to commit to significant changes just yet. Exclusivity remains a contentious issue for fans, especially given the ambiguity surrounding Microsoft’s strategy in recent years.

Sharma is determined to win back fans. “We will focus on players returning every single day because our platform and games are great. We need to execute effectively to achieve this, starting with hardware,” she told employees.

While software improvements for existing consoles are underway, the next-gen console, codenamed Project Helix, looms on the horizon. One of Sharma’s first actions as Xbox CEO was to announce Helix, promising that the next Xbox console “will lead in performance and play your Xbox and PC games.”

Alpha versions of Project Helix are set to reach developers in 2027, indicating that the next generation of Xbox is still a ways off. Sharma didn’t provide many details about Project Helix during the all-hands, but she emphasized the need for it to represent a significant advancement in console and PC gaming, as well as performance and security.

Microsoft has yet to clarify how Project Helix will support both Xbox console games and PC titles. Will it operate like a PC? Will it still utilize the Xbox OS? Answers to these questions may take some time, but the renewed investment in the Xbox console and OS is promising after a period of stagnation.

Sharma also highlighted the importance of enhancing the overall Xbox platform, which led to a recent reorganization of the platform team to bring in more technical expertise. Jared Palmer is joining Xbox as VP of engineering and a technical advisor to Sharma, having recently transitioned from GitHub. Tim Allen has been brought on to lead Xbox design, integrating design, engineering, and research. Jonathan McKay and Evan Chaki have also joined from CoreAI.

It’s clear that several former CoreAI executives are now part of Xbox. Anticipating potential backlash from gamers regarding the influx of AI talent, Sharma announced the cancellation of the mobile Copilot gaming feature and the halt of Copilot development for Xbox consoles shortly after the leadership changes were revealed. This move was a strategic win, but it also reflects the current exodus from CoreAI, including Sharma herself.

Sharma is optimistic that her new team will provide the expertise needed to advance the Xbox platform. “Right now, it is too hard to ship impact quickly; we spend too much time focused inward instead of engaging with the community; and we lack the necessary capabilities in some key areas,” she noted in a memo. “We are promoting leaders who built Xbox and bringing in new leaders with consumer and technical expertise we do not yet have. This will allow us to delve deeper into the areas that matter most and move faster.”

Jason Ronald, responsible for Project Helix, is being promoted, while Xbox is also losing Roanne Sones to a leave of absence. Sones has been instrumental in collaborating with OEMs to bring devices like the Xbox Ally from Asus to life. Kevin Gammill, corporate vice president of Xbox user experience, is also stepping down after nearly two decades at Microsoft.

This shakeup within the Xbox platform aims to “build a platform that is affordable, personal, and open by staying close to the work and the people we serve,” according to Sharma. Microsoft has already experimented with a more open Xbox platform through the Xbox Ally devices, which run Windows at their core with an Xbox-like experience layered on top. The pressing question remains: How will Microsoft keep the next generation of Xbox consoles “affordable” amid a RAM crisis?

I believe the answer lies with OEMs like Asus. While Sharma didn’t address this directly during the all-hands, she hinted at more hardware choices for Xbox in the future. “Because we want to be where the world plays, we will build our own great hardware but also create a strong ecosystem that expands choice and reach for us in the future,” she stated.

This could explain Sharma’s increased focus on the underlying software platform, including enhancements for both Xbox and PC. Microsoft has struggled to fulfill its Xbox on PC promises in the past, but getting this right is crucial for Project Helix and the “return of Xbox.”