Xbox CEO emphasizes the need for new IP to ensure the company’s future, despite recent studio closures.

As Xbox undergoes a significant transformation, resulting in over 1,600 job cuts and the shedding of several studios, CEO Asha Sharma recently emphasized in internal communications that the division will “not survive” without new intellectual properties (IP). While this statement carries weight, it feels somewhat contradictory considering the extensive downsizing of teams responsible for some of Xbox’s most intriguing new series.

Sharma shared her thoughts during a recent town hall, with unauthorized transcripts of the discussion surfacing.

“On content, I think this is probably the thing that you are all seeing the most about as we’re making a lot of changes,” she reportedly stated. “We’re backing our strongest franchises. I want our great games to become great global billion-dollar franchises.” This indicates a clear focus on existing successful titles, as the company shifts development of the Halo series to Activision, known for its consistent release schedule, albeit with varying quality. Additionally, Obsidian Entertainment is now under Bethesda’s umbrella, where it will be working on a new Fallout game.

However, Sharma’s subsequent remarks raise eyebrows in light of the company’s recent decisions.

“I would also like to see us continue to create enduring new IP. We will not survive if we only revive the past. We have to find new ways, and courage, to have invention on new IP, that reaches new sets of audiences.” While her point is valid—no publisher can thrive solely on past successes—it’s ironic to hear this after the company has severed ties with studios like Double Fine, Ninja Theory, Compulsion Games, and Undead Labs, all of which contributed new IP for Microsoft. Three of these studios have even pursued management buyouts to avoid closure, with Ninja Theory being the exception.

Double Fine is recognized for its unique concepts, having launched both Kiln, a multiplayer action game focused on pottery, and Keeper, where players control a sentient lighthouse in the past two years. Ninja Theory is known for the Hellblade series, while Undead Labs developed State of Decay. Compulsion Games recently released South of Midnight, a captivating action-adventure set in the American South, inspired by stop-motion animation. Arkane Studios, currently negotiating its future with Microsoft, delivered the mind-bending Deathloop and is working on Marvel’s Blade.

For the studios that remain, the outlook isn’t much brighter. By integrating Obsidian into Bethesda, it suggests that Obsidian may not have the bandwidth to create unique titles like Pentiment, as it will be focused on Fallout and Elder Scrolls sequels. Reports indicate that id Software has been reduced to half its previous size, making future Doom titles a challenging endeavor.

In essence, Sharma’s statements seem at odds with the company’s actions. While she may be referring to new live-service or multiplayer games that attract millions, her comments come off as hypocritical given Microsoft’s recent moves.

The layoffs and consolidations have drastically altered the landscape of Xbox.