The Xbox reboot continues to generate major reactions, but this time Asha Sharma herself has spoken about what led to the current situation. The head of Microsoft’s gaming division says the company moved in too many directions in recent years while drifting away from the core business on which the brand was originally built.

New details have emerged about the Xbox restructuring, and this time they do not come from anonymous internal sources, but from Asha Sharma. The new head of Microsoft’s gaming division recently signed the statement announcing the latest wave of layoffs and the fate of five internal studios, and she has now spoken in an interview about how Xbox lost focus in recent years. According to Sharma, the company would have been much better equipped to weather the current crisis if it had been in a stronger financial position, but past decisions have left it in a more difficult place as it tries to rebuild. In an interview with Fortune, she described the current reorganization as “the most significant restructuring in Xbox history” and made it clear that many of the problems did not appear overnight. The executive said the push for growth created too many parallel bets, while resources were spread too thin.

“To grow, we made a lot of bets, and in doing so, we stopped focusing on our core business. The primary measure of a good company is knowing where you invest your resources, and we simply spread them too thin,” Sharma explained. The statement is especially striking given that Xbox has spent recent years trying to strengthen its console presence, Game Pass, the PC ecosystem, cloud gaming, and several other business directions at the same time.

Xbox Wants Its Core Business to Return to Consoles

One of Asha Sharma’s most important claims is that roughly 80% of Xbox’s current revenue comes solely from content and services. She considers that dependence excessive for a brand that historically relied on a balance between hardware, software, and its ecosystem. Sharma also acknowledged that Xbox’s profitability is between three and ten times lower than that of other comparable platforms and publishers, which has forced the company to rethink its internal structure completely. The core business mentioned by the executive refers to consoles, because Sharma openly said Xbox needs to focus on that area again. As part of the restructuring, Microsoft plans to implement a simpler organizational model and remove several management layers. The goal is to centralize decision-making and make teams more efficient after years in which Game Pass and other projects greatly expanded the brand’s scope.

The situation is made even more difficult by rising hardware costs, which directly affect a console-based business. Microsoft recently warned that the cost of components such as storage and memory has increased 2.5 times, and that it expects a further rise before the end of 2027. According to Sharma, “a healthy Xbox could have withstood the impact of the hardware crisis,” but she admitted that with “an unhealthy Xbox,” it is much harder to face this scenario. That pressure is accelerating many of the changes the company needs to make.

Sharma says the recovery will be a gradual process, not an overnight turnaround. Among the new hardware business models Microsoft is considering are expanded financing programs that could make console purchases easier, while the company also wants to strengthen the Xbox ecosystem on PC and mobile devices. “Our core business needs to be healthy, and that will be necessary, though not sufficient,” Sharma concluded.

Source: 3DJuegos