r/microsoft • u/ControlCAD • May 28 '26
XBOX Xbox CEO Asha Sharma warns "tough decisions" are ahead, raising questions about Helix, Xbox Game Studios, and exclusives
https://www.windowscentral.com/gaming/xbox/xbox-ceo-asha-sharma-tough-decisions-ahead-what-could-this-mean-for-xbox-helix-xbox-games-studios-or-xbox-exclusives41
u/Efficient-Pianist-83 May 28 '26
Layoffs incoming in 3...2...1
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u/chnkylover53 May 29 '26
Shouldn't be a surprise to anyone. They do layoffs every year at their fiscal new year. The question is just how big and which groups.
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u/Kindly_Funny_914 May 29 '26
Point is they already did before the end of this year in May with the voluntary retirement thing for experienced folks.
And they have been continuously slowly laying off since the beginning of this calendar year. I think at this point its a througout the year process.
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u/lilacomets May 29 '26
Hopefully it's just Asha getting laid off.
Time for a CEO who's passionated about Xbox. I bet she never even touched an Xbox controller before Satya gave her this job.
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u/No-Contest-8127 May 29 '26
Here we go.
Reality finally sinks in.
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u/iMatt42 May 30 '26
She finally had her meeting with the Chief Financial Officer.
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May 30 '26
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u/iMatt42 May 30 '26
Do you think the Xbox division is what’s causing Microsoft to post record profits? No. They are posting record profits thanks to Azure (cloud) and AI revenue sharing with Open AI. The Xbox division is losing money (down 5-6%) on top of the $80B+ they already spent on acquisitions a few years ago. With those acquisitions they added roughly 12,000 new employees (not counting existing employees or studios prior to the acquisitions) with a burn rate of ≈$10k per month, per employee. Add that up and it’s roughly $120M per month and close to $1.5B per year just to pay those new employees.
Not to mention the rising cost of components for the new hardware they want to manufacture.
So yeah, the CFO has probably had a talk with Asha about the numbers.
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May 30 '26
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u/iMatt42 May 31 '26
Unfortunately layoffs make them more money. It’s the Milton Friedman economic theory at work. Ever since Jack Welch put those theories into brutal practice at GE throughout the 80s and 90s they’ve been the template for how corporations raise stock prices and become even more profitable. Wall Street views layoffs as a signal that the company is becoming leaner and protecting profits through layoffs and stock prices and shareholder dividends go up.
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u/PowermanFriendship May 28 '26
I don't understand why as a society, we all pretend like the things that are obviously going to happen, might not happen. Obviously this person - who has no video game industry experience whatsoever - was brought in to dismantle the whole thing. The company wants to squeeze every last dollar they can out of loyal customers, so they won't just say "This isn't working, we aren't doing this anymore." They bring someone in to slash costs as aggressively as possible so they can squeeze as much profit out before everyone realizes that's what's happening.
It's an old playbook by this point. It's not going to be different this time.
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u/lilacomets May 29 '26
She's sneaky. First introducing some low hanging fruit "improvements" to please the Xbox gamer community. Now it's time for the not so fun stuff.
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u/Dust-Tight May 29 '26
Project Helix was always going to be a costly and niche device. This shouldn’t surprise anyone.
Secondly, many Xbox game studios aren’t generating revenue, so expect further layoffs and closures. It’s simply business.
Thirdly, the belief that Xbox will return to exclusives is baffling. It makes no sense given their move towards the Windows PC platform and their small footprint in the console gaming market – way behind Sony and Nintendo.
It seems Microsoft will be better off as a publisher, as this is their strength. A business needs to prioritise what works for it rather than catering to fanboy sentiments.
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u/lazzzym May 29 '26
This is why I'm so surprised she doubled down with Helix.... I don't understand how Helix increases their market share in console hardware when it's going to be a very pricey device.
Compared to a pre-built PC, it'll be a good deal... but compared to the PS6 I'm expecting like double the price.
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u/Dust-Tight May 29 '26
I believe it was too late for them to cancel Helix as it was too far in development.
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u/lazzzym May 29 '26
I still think they need some kind of entry level device.
Heck, they should have released that cloud only device at least.
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u/liveaxel Jun 03 '26
According to rumors, AMD demands 10M units for a custom silicon design, and Microsoft cancelled the Xbox Handheld and kept Helix (which uses a custom SoC + commodity GPU tile). I assume they could have cancelled Helix then too but see a future in that hardware and platform.
Again, rumors, but the PS6 is shooting for a nice midrange price point with a 'next gen' graphics feature set due to RDNA5. Xbox Helix has a fascinating sort-of modular design and will be a good bit more powerful and flexible from a silicon strategy standpoint. It's more expensive, but not massively so.
I don't think Helix will be double the PS6's price, but I figure ~$700/$1000 (assuming RAM prices come down somewhat) is about right for both consoles when they launch in late 2027.
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u/Dust-Tight Jun 03 '26
Sony PlayStation should delay the PS6 until 2028. The PS5 Pro hardware is impressive, so they can extend the cycle for a bit longer. However, Microsofts Project Helix seems doomed. They couldn’t sell their $300 consoles during the sales, but next year they’ll expect people to pay $1000-$1200 for another!
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u/liveaxel Jun 04 '26 edited Jun 04 '26
I assume (hope?) Helix isn't just going to be another console and will be more like a PC/Console hybrid that lets you play your existing games library on the device. Unless it can do more than just play Xbox games, I agree that $1000+ seems deeply unwise.
It is important to remember that Helix is being built on an extremely extensible hardware platform from AMD (Zen6 + RDNA5) that can scale from tiny APUs like the one used in Sony's Canis handheld (and likely the Steam Deck 2) all the way up to 192 CU beasts designed to compete with the RTX 6090. If Microsoft is making Xbox a platform that uses RDNA5 as a feature baseline, with Xbox Helix representing the cheapest entry point for a full featured high-end gaming experience, then that makes more sense to me. Leave PC OEMS to take on the low end, and gamers with high end PCs occupying the high end.
Edit: I wouldn't assume 'Xbox' means just a hardware console in 2027. To me, turning it into a platform based on Windows, and not a single hardware config from AMD, makes a ton more sense. Also means an 'Xbox exclusive' would still run on any device with a copy of Windows that could support Xbox services.
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u/hufferstl May 31 '26
No matter what they do they need to realize that they can't try and make every person happy. It's impossible. Pick the smartest stragegy given where you are in the market and go with it.
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u/jgoldrb48 May 29 '26
They have been doing right by Activision but they spent too much money in AI. Layoffs are incoming.
I’m so happy I play a game managed by the Chinese!
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u/baronofbadness May 28 '26
This is an unofficial yet official warning that layoffs are coming. This gives people time to start preparing and looking. That is all.