Xbox returns to growth after a big reset — Sharma outlines plans for next-gen consoles and more

Microsoft’s gaming business has returned to growth after a difficult start to the year, Xbox CEO Asha Sharma told employees during an internal town hall. Sharma reaffirmed that consoles will remain central to Xbox’s future, while the company prepares the next-generation Xbox Helix as a family of devices and continues to expand Game Pass and its PC ecosystem.

Xbox has spent much of the year restructuring its business through layoffs, studio changes and divestitures. The company has also revised its Game Pass strategy, removed Call of Duty from the service and reduced its focus on growth at any cost.

Xbox returns to growth

Sharma said Xbox entered the year with declines in player numbers, hours played and revenue. The company has since stabilized the number of hours played and returned to year-over-year growth. She also pointed to a 30 % increase in positive brand sentiment over the past year and cited strong starts for Gears of War: E-Day, Minecraft Dungeons 2 and World of Warcraft Forever.

We’re making the right decisions to reinvest in the business. After an all-time low, we’ve started to return to growth, more than two to three times what we were, and we expect that to continue, - Asha Sharma, Xbox CEO.

Consoles regain priority

According to Sharma, Xbox’s strategy going forward will be built around "four C’s": Core, Content, Creation and Connection. She said the company must invest more heavily in consoles, even though the overall console market is not currently growing.

We don’t have the right to grow beyond console if we can’t serve our most valuable players the right way, - Asha Sharma.

Microsoft plans to continue investing in Xbox Series X and Series S through services and features such as Xbox Cloud Gaming, Xbox Play Anywhere and its disc-to-digital program. Game Pass is also expected to become “more flexible for more players,” suggesting that Microsoft may eventually allow subscribers to select more precisely which types of content they want to access.

Xbox Helix will cover multiple devices

Sharma also provided new details about Microsoft’s plans for the next Xbox generation, internally known as Helix. She said once again that, rather than developing a single successor to the Xbox Series X|S, Microsoft is planning a family of devices aimed at different types of players.

We are moving to a family of devices for Gen-10. There is not one device that fits all. We will certainly have a great console first, but we also know that many players will be on the go, - Asha Sharma.

This suggests that a traditional home console will remain the flagship product, while portable hardware and potentially other form factors could join the lineup. Sharma said Microsoft will manufacture some devices itself while partnering with other companies on products where they have an advantage.

She also said development of the operating system for the next-generation consoles is progressing well, although Microsoft has yet to provide detailed specifications or a release timeframe for Helix.

Xbox wants a stronger position on PC

Microsoft is also continuing to build its PC gaming business. Sharma said the company wants to expand Battle.net as a platform and claimed that its user retention is approaching Steam’s level. The recent agreement to bring CD Projekt Red titles such as The Witcher 3 to Battle.net is expected to help expand the platform’s audience.

At the same time, Microsoft does not intend to abandon competing PC storefronts. Sharma said Xbox will continue investing in platforms with distinct audiences, including Steam.

Easier publishing across Xbox platforms

Sharma said Xbox is simplifying its publishing targets and streamlining APIs to make it easier for developers to release games across Xbox Series X|S, Xbox Helix and Xbox PC. For years, developers have criticized the complexity involved in supporting multiple Xbox platforms and configurations. A unified set of tools could help Microsoft expand its game library while reducing the work required to support consoles, PCs and future portable hardware.

The company’s restructuring has also moved some studios under dedicated publishing organizations, including Activision and Bethesda. Other teams have been closed or divested as Microsoft attempts to reduce costs and streamline its gaming business.

However, the CEO also warned employees about economic uncertainty, disruption across the entertainment industry and the effects of the ongoing memory shortage crisis. Xbox’s reported return to growth therefore comes alongside continued pressure to control spending and prioritize investments carefully.