Microsoft CEO Satya Nadella said he feels “fantastic” about the Xbox brand and its ongoing “streamlining” process led by Xbox CEO Asha Sharma, despite the division cutting hundreds of jobs and restructuring major game studios. Nadella made the remarks during an interview on the Sources podcast with Alex Heath, touching on the strategy behind Microsoft’s gaming division as it plans for future fiscal growth.
Satya Nadella Addresses Xbox Streamlining and Studio Overhauls
Microsoft’s leadership expressed strong confidence in the gaming division’s intellectual property portfolio amidst a turbulent restructuring phase. According to transcripts of the Sources podcast shared by IG, Nadella praised the operational changes happening internally.
“I feel fantastic about the IP we have right now,” Nadella stated during the interview. “If I look at the studios, the IP portfolio we have, and our ability to then take that and produce great games going forward – I feel fantastic. There’s some amount of streamlining the team is doing, and Asha is doing, which is great to see.”
Recent Layoffs and Studio Reassignments at Xbox
Nadella’s positive assessment of the brand follows a series of deep cuts and organizational shifts across Microsoft’s gaming ecosystem. Xbox laid off an additional 268 employees this week, adding to the restructuring announced by Asha Sharma in July that affected 3,200 roles. Matt Booty, Xbox’s Chief Creator Officer, stated the company is roughly three-quarters of the way through its planned restructuring.
The overhaul has also reshaped first-party studio alignments. Obsidian has been moved under Bethesda’s control, while Playground and Turn 10 have merged. Meanwhile, Rare, World’s Edge, and the Halo franchise have moved under Activision’s oversight. Studios such as Double Fine, Compulsion Games, and Undead Labs have been permitted to go independent, though Undead Labs and Age of Empires developer World’s Edge still suffered major layoffs during the process. British studio Ninja Theory faces impending closure after proposed sales fell through.
Did you know? In July, Xbox CEO Asha Sharma characterized the division’s overhaul as the “most significant” restructuring the company had ever undertaken, stating that “great technology gets better when it gets simpler, not bigger.”
Sustainable Business Models and Next Fiscal Year Targets
Beyond the studio cuts, Nadella emphasized that the overarching goal remains building a sustainable business model to deliver games across multiple platforms. He reiterated that Microsoft aims to act as both a great publisher and a great platform provider spanning PCs and Xbox consoles.
“And so that is sort of our goal, and I think Asha and the team have said that Xbox is going to get back to growth this next fiscal year, and that’s the plan they’re executing on, and in that process, do a bang-up job of producing some great games,” Nadella told Heath on the Sources podcast.
Frequently Asked Questions
Who is the CEO of Xbox?
Asha Sharma serves as the CEO of Xbox, leading the division’s ongoing restructuring and business strategy.
What recent changes have happened to Xbox studios?
Xbox has undergone extensive restructuring, which includes moving Obsidian under Bethesda, shifting Halo and Rare under Activision, granting independence to Double Fine, Compulsion Games, and Undead Labs, and facing studio closures and layoffs.
What did Satya Nadella say about the Xbox restructuring?
Microsoft CEO Satya Nadella stated that he feels “fantastic” about the brand’s IP portfolio and described the team’s streamlining process under Asha Sharma as “great to see.”
What are your thoughts on the ongoing changes at Xbox and the restructuring of its game studios? Let us know in the comments below, and subscribe to our newsletter for more industry updates.
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