Much is still new for Sharma, the 38-year-old executive whom Microsoft CEO Satya Nadella in February put in charge of turning around one of entertainment\u2019s biggest brands. Her office, adorned with Xbox controllers, framed Halo<\/em> game discs, and a Tony Hawk\u2019s Pro Skater<\/em> skateboard, at first seems like an odd fit for an executive who famously had zero past video game experience.<\/p>\n Yet the Xbox CEO who\u2019s replaced gaming legend Phil Spencer is moving fast. Xbox\u2019s finances have been in shambles while its market share has tanked from its peak years ago. Sharma must fix its economics while improving its brand. She has been blunt about Xbox\u2019s poor performance; has cut thousands of staff members; is reimagining how Xbox markets and sells its products; is upending its tech stack; has divested or reorganized smaller studios; and is focusing Xbox around its biggest franchises and publishing groups, including Blizzard Entertainment.<\/p>\n If Spencer was a gamer\u2019s gamer, Sharma is the decisive boardroom boss.<\/p>\n Only Xbox\u2019s is a very big, and opinionated, board. Every gaming conference Sharma attends, every decision she makes, and every post she publishes on social media is being closely watched by rabid gaming fans and Microsoft\u2019s top brass.<\/p>\n \u201cIt\u2019s hard to be a first-time CEO \u2026\u00a0where everybody sees everything you do,\u201d Sharma told Fortune,<\/em> sitting in one of her office\u2019s blue velvet chairs, with several packs of NeeDoh stress balls by her side and wedding invitations from fans on her desk. \u201cWe are trying to get done an inordinate amount of things in an inordinate amount of time.\u201d<\/p>\n The attention, Sharma said, is a reflection of how much Xbox matters to people. \u201cThe benefit of everybody caring is that you\u2019re going to be able to pick out things that people really care about to actually make our product better,\u201d she said.\u00a0<\/p>\n Unafraid to create tensions, the jacket- and sneaker-loving executive has come in clear-eyed and with swagger, indirectly questioning her predecessor\u2019s strategy, and has shown a remarkable knack for marketing that plan with deftly written employee memos, new slogans, and strategic posts on social media, where meme after meme of Sharma also appear. (One deepfake video shows her yelling, \u201cYou\u2019re all fired!\u201d to a group of studio employees.)<\/p>\n MERON MENGHISTAB for Fortune<\/p>\n<\/figure>\n Flashy moves aside, Sharma has a challenging road ahead. Turning around a sprawling $21 billion business that includes hardware, creative studios, and thousands of video game titles is a task that would test even the most experienced of CEOs. And at a time when Microsoft is intensely focused on competing in the AI race, many industry observers wonder how committed the company is to the gaming business, and if Nadella has put Sharma in charge to prepare for an eventual sale or spinoff.<\/p>\n For an enterprise software company like Microsoft, a consumer gaming business stands out as a bit of an \u201codd condiment,\u201d said Joost van Dreunen, a gaming expert and professor at NYU\u2019s Stern School of Business. \u201cHow you value, operate, manage, and finance a creative division is very different than most of the other parts of the Microsoft empire.\u201d<\/p>\n As Sharma works to revitalize the storied gaming unit, Microsoft employees, investors, analysts, and gamers are all focused on a key question: Can a gaming industry outsider bring Xbox back to its glory days\u2014and if she can, under what structure will that happen?<\/p>\n For all its current challenges, Xbox is a Microsoft success story. In the quarter-century since the software giant launched its first console, Xbox has grown into one of the company\u2019s most visible and influential global consumer brands. Even if you\u2019ve never picked up a game controller, there\u2019s a good chance you recognize some of its hits.<\/p>\n There are cultural touchstones like Halo,<\/em> a first-person shooter game that became a global multimedia franchise spanning a television series, comic books, and toys.<\/p>\n There\u2019s Xbox Live, which helped make multiplayer online gaming a mainstream form of entertainment.<\/p>\n And there\u2019s the beloved Xbox 360 console of the mid-2000s, which at its peak rivaled Sony\u2019s PlayStation in sales, and on which a generation of young gamers\u2014including this writer\u2014cut their teeth.<\/p>\n With Microsoft\u2019s 2023 acquisition of game publisher Activision Blizzard for $69 billion, Xbox gained custody of blockbuster titles like Call of Duty, World of Warcraft<\/em>, and Overwatch<\/em>, making it one of the most significant players in a video game market that has ballooned to several times the size of the global theatrical box office.\u00a0<\/p>\n The fact that Xbox now finds itself in fix-it mode instead of on a victory tour for its 25-year milestone is the result of what current and former employees say has been a series of strategic miscalculations, conflicting internal priorities, and a loss of focus on the basics.<\/p>\n Game Pass, a Netflix-style monthly gaming service, helped Xbox build a subscription business. But it also led to a cannibalization of sales for the company\u2019s higher-priced first-party game titles, especially during the critical launch period. And competing internal metrics within different teams\u2014such as subscription revenue versus store revenue\u2014exacerbated the problem, said former employees.<\/p>\n As Microsoft acquired more game publishers\u2014including Minecraft<\/em>-maker Mojang Studios\u2014it didn\u2019t pay enough attention to its core console, which still represents 80% of its business, former Xbox employees said. PlayStation and Nintendo have offered more exclusive titles that lock in gamers.<\/p>\n The Activision Blizzard acquisition, in particular, made the overall business more complex and intensified pressure to show returns. The purchase vaulted Xbox to become Microsoft\u2019s third-largest business by revenue.<\/p>\n \u201cIf there\u2019s any place that we got out of sync maybe in the last five years, it\u2019s not that any one of those [individual bets] wasn\u2019t working. It\u2019s just that we hadn\u2019t connected the dots maybe as well as we should have,\u201d Matt Booty, Xbox\u2019s chief content officer, told Fortune<\/em>.<\/p>\n JOHN GURZINSKI\/AFP via Getty Images<\/p>\n<\/figure>\n While Xbox remains one of the three major console platforms, it\u2019s seen a big drop-off. Current-generation Xbox consoles have sold just a little over a third as many units as the PlayStation 5, according to third-party estimates. Higher hardware costs, fueled by memory chip shortages, are adding to the woes.<\/p>\n A Microsoft measure of profit margin has been around 3% for the Xbox unit, a third to a tenth of competitors\u2019 levels and a far cry from the typical expectations Microsoft Chief Financial Officer Amy Hood has for its major businesses.<\/p>\n Sharma\u2019s turnaround strategy is about focusing on hardware, player experience, high-value franchises, updating Xbox\u2019s tech, and meeting gamers where they\u2019re at.\u00a0<\/p>\n \u201cWe\u2019re not here to do the minimum viable thing to just have a good business,\u201d she said. \u201cWe\u2019re here to be the No. 1 entertainment company.\u201d<\/p>\n Some of her vision is becoming clearer. Xbox is planning a major overhaul of Game Pass that would have players choose features \u00e0 la carte, including add-ons for console-only games, cloud gaming, and multiplayer, with the system operating on a tiered structure, according to people familiar with the strategy. Sharma also plans to release a next-generation handheld device by the 2027 holiday season and the next console by the holidays in 2028.<\/p>\n Inside the company\u2019s secretive lab, known as Building 87 on campus, she has been plotting with lead designers such as Carl Ledbetter about the next-gen Project Helix hardware that could get gamers to stick with Xbox for mobile play, tinkering in regular stand-up meetings over prototypes and which strategic partnerships might help Xbox evolve.<\/p>\n While she has a reputation for being blunt, she is also introverted. In meetings, she often sits back and listens, sometimes while on her phone, yet tracking every detail, stopping discussions to ask sharp, probing questions or offer direct feedback, staff members said. She\u2019s often chewing gum, and she is known to call colleagues from her car to check in while on her morning commute.<\/p>\n \u201cAs a leader, you\u2019re taught to be confident, and I think being curious is way more important,\u201d Sharma said. \u201cIf you\u2019re confident, you might be right, and if you\u2019re curious, you will find a better way. If people understand what\u2019s happening, they will come up with better ideas to fix it than anyone else will.\u201d<\/p>\n Soon after her appointment as head of Xbox, Sharma traveled to Blizzard\u2019s campus in Irvine, Calif., to get a sense of gaming culture and meet with Blizzard President Johanna Faries, who told Fortune<\/em> that Sharma has led primarily through inquiry, asking a myriad of questions to understand how things are working.<\/p>\n Ever the marketing whiz, Sharma had Xbox\u2019s new motto plastered on office walls after she took over: \u201cGreat games; return of Xbox; future of play,\u201d it reads. On her X account, which she runs herself, she celebrates major announcements and posts photos of her work travels. One recent photo captures her wearing aviator sunglasses and an Xbox zip-up, standing next to Japanese video game designer Hideo Kojima, who will develop his much-anticipated stealth game Physint<\/em> with Xbox after a deal with Sony fell through.<\/p>\n Sharma recently created a new arm within Xbox meant to centralize and double down on commercial opportunities for top franchises such as Minecraft<\/em>, similar to how Disney spreads its Marvel brand into movies, shows, theme park attractions, and more. A new team will also explore fresh ways to create and distribute its games across its devices using technologies such as AI.<\/p>\n Xbox is also planning and rolling out more games exclusive to its platform, including Gears of War: E-Day,<\/em> which launched Oct. 6.<\/p>\n Another noticeable shift has been to steer financial resources away from smaller studios toward those that make Xbox\u2019s most iconic franchises, with the goal of more frequent major releases. (With Minecraft<\/em>, specifically, the goal is to make it more competitive with Roblox<\/em>, which is popular with younger generations). Brian Fargo, a game designer who is developing the upcoming first-person role-playing game Clockwork Revolution<\/em>, told Fortune<\/em> that under Sharma, studios must present a clear, commercial \u201cinvestable business case\u201d rather than expecting blank-check funding.<\/p>\n MERON MENGHISTAB for Fortune<\/p>\n<\/figure>\n The hard-nosed approach to costs is also evident inside Xbox. So far, Sharma has cut 1,868 people as part of plans to reduce headcount by 3,200 during the next year, and she\u2019s slashed several management layers. She\u2019s planning the next rounds of layoffs for this month, November, and January, people familiar with the plans said, although layoff plans can change. Among the laid-off have been devoted staff members who had worked at Xbox for decades, which could mean a loss of valuable institutional knowledge.\u00a0<\/p>\n Some employees have appreciated Sharma\u2019s transparency, but the decision to structure the layoffs in several waves has left some staff demoralized, feeling as if they are sitting under a yearlong cloud, waiting to see if their roles will be eliminated next. There have also been some hiccups: Fortune<\/em> identified at least one Xbox employee who was laid off but then given a chance to stay at the gaming unit.<\/p>\n Sharma acknowledged the high-stakes environment she\u2019s navigating and tough decisions she\u2019s had to make, but said she values people and doesn\u2019t intend to be transactional.<\/p>\n At an organization as big as Microsoft, there\u2019s also been inevitable drama, including a recent rekindling of an old turf battle between the Xbox and Windows teams.<\/p>\n The two sides have clashed over what software should run Project Helix, the next-generation hardware. Windows leaders wanted an upcoming handheld device to use a trimmed-down version of Windows Home. Sharma\u2019s team, meanwhile, has sought to build and control its own software to get the best gaming performance.\u00a0<\/p>\n Tensions ran high enough that a senior Xbox executive threatened to scrap the handheld project rather than adopt the Windows build, according to people briefed on the clash. Xbox is now largely controlling the direction of the operating system for the project, though Sharma emphasized the two still collaborate closely, saying, \u201cWe can\u2019t build Helix on our own.\u201d<\/p>\n Some people familiar with the matter also said engineering deadlines for Project Helix have been moved up by at least several months, putting pressure on development teams to get the work done faster, including by using AI. Responding to how AI affects Xbox\u2019s goals or place within Microsoft, Sharma said she won\u2019t use \u201cAI for AI\u2019s sake,\u201d viewing it as a tool to solve specific engineering and performance problems such as developer workflows.<\/p>\n Successfully navigating those kinds of conflicts will be key if Sharma is to build up the authority and credibility necessary to get Xbox back on track.<\/p>\n Before Nadella chose her to run Xbox, Sharma led the product side of the group that built Microsoft\u2019s AI Foundry platform and was also involved in products for the coding AI tool GitHub Copilot. She\u2019s one of several newer or younger executives whom Nadella is entrusting as longtime company leaders continue to exit during the fast-moving AI boom.<\/p>\n A mother of three who is of Indian descent, Sharma grew up in Racine, Wis., along Lake Michigan. Her parents divorced when she was young, and her mother worked in retail. As a teenager, Sharma worked at a golf course and sold coupon books to earn money. She\u2019s discussed her habit of morning runs and pour-over coffee, her packed work and travel schedule, and her second-degree black belt in the Korean martial art tae kwon do.<\/p>\n \u201cThe number one thing that I\u2019ve worked on through [my life] is just how to learn,\u201d she said. \u201cHow to learn the space; how to learn to solve problems; how to learn from people that are just like you and nothing like you.\u201d<\/p>\n After earning a business degree from the University of Minnesota in 2011, she began her career in Microsoft\u2019s marketing department before eventually landing at Meta Platforms, where she was vice president of product leading teams behind the messaging tools on Facebook and Instagram. In 2021, she became Instacart\u2019s chief operating officer, helping guide the grocery-delivery company through its initial public offering and the effort to scale the business toward profitability.\u00a0<\/p>\n Ina FASSBENDER \/ AFP via Getty Images<\/p>\n<\/figure>\n Sharma\u2019s specialty is jumping into industries where she has no background and quickly identifying problem areas to fix, said Eric Boyd, a former Microsoft executive who brought Sharma back to Microsoft in 2024.<\/p>\n \u201cIf someone\u2019s not performing, she will tell them that day that this is not working,\u201d Boyd said. \u201cShe will change direction on the course that we need to go.\u201d<\/p>\n When it comes to Xbox\u2019s trajectory, many wonder if the turnaround effort will ultimately point to a new home base.<\/p>\n After Sharma was announced as Xbox CEO in February, staff members\u2019 emails changed from ending in microsoft.com to xbox.com. In April, Microsoft dropped its Microsoft Gaming title and changed the division\u2019s name to Xbox.<\/p>\n Several current and former staff members believe Xbox is being prepped for an eventual sale, spinoff, outside investment, or conversion into a subsidiary. Some said they were aware of a high-level presentation, made after Sharma took over, that explored such scenarios. Tech news website The Information earlier reported on discussion of a potential spinoff.\u00a0<\/p>\n Judson Althoff, who is in charge of Microsoft\u2019s commercial side and is one of the company\u2019s highest-ranking executives, told Fortune<\/em> that Xbox is valuable to Microsoft\u2019s broader enterprise business because its low-latency demands stress-test Microsoft\u2019s cloud, and it helps the company maintain retail relationships with giants like Walmart while connecting the company to creator demographics through Minecraft<\/em>.<\/p>\n \u201cAsha is one of the best leaders we have at the whole company. We would not have put her on a business we intend to sell,\u201d Althoff said. \u201cThere\u2019s going to be a ton of speculation about all this. Time will tell.\u201d<\/p>\n It\u2019s also clear that few things matter at Microsoft right now as much as AI. Most employees work on the technology in one form or another as Nadella pivots the software giant to win the enterprise and cloud computing parts of the AI revolution. Former employees and analysts have wondered whether Xbox has a place in that push.<\/p>\n David Paul Morris\/Bloomberg via Getty Images<\/p>\n<\/figure>\n Because Microsoft is spending heavily to win the AI race, it may over time simply have to offload non-AI parts of its business, said van Dreunen, the NYU professor.\u00a0<\/p>\n \u201cBefore they drive high-margin revenue from their AI investment, they\u2019re going to start having to\u2014to stay warm\u2014they\u2019re going to have to burn the furniture,\u201d he said. \u201cIf that\u2019s the future that comes around, then Xbox would be increasingly attractive for selloff to fund their AI future.\u201d<\/p>\n On a sunny Saturday in September, thousands flocked to the Anaheim Convention Center in southern California for Blizzard\u2019s BlizzCon. When organizers opened the gates, a flood of people ran inside. Fans passed under life-size World of Warcraft<\/em> portals and a massive replica of Diablo<\/em>\u2019s demonic Lilith character on their way to lines of computers loaded with the game\u2019s latest updates.<\/p>\n Nearby, Sharma walked the floor with members of her executive team, taking in the fandom and people\u2019s excitement over an announcement earlier in the day that Blizzard would release World of Warcraft: Forever,<\/em> a reimagining of the original WoW<\/em>.<\/p>\n It\u2019s too early to know whether all of Sharma\u2019s moves are working; the next test is Microsoft\u2019s quarterly earnings report this month. Sharma has set a long-term goal for Xbox to become one of the few entertainment platforms to reach more than 1 billion people a day. Right now, it has around 100 million daily active users.\u00a0<\/p>\n Active console usage has rebounded year over year, compared with the previous year\u2019s decline, and Sharma said she expects financial improvements to start showing in Microsoft\u2019s fiscal 2027. As it stands, the price of the Helix console has internally been projected to cost consumers between $1,200 and $1,800, unless Microsoft decides to subsidize the cost.<\/p>\n That\u2019s a hefty price tag, especially at a time when consumers have so many other gadgets, from smartphones to wearable AI devices competing for their dollars. Piers Harding-Rolls, a gaming analyst at Ampere Analysis, said the global console market remains capped at roughly 200 million users per generation. Gen Z and Gen Alpha are largely skipping dedicated home consoles for mobile, PC, and platforms like Roblox<\/em>, he said.<\/p>\n Mindy Schauer\/MediaNewsGroup\/Orange County Register via Getty Images<\/p>\n<\/figure>\n There are many signs of Xbox\u2019s legacy throughout Microsoft\u2019s campus. At its campus store, employees and visitors can get the latest products, and when you walk into the Xbox building, you are greeted by a life-size statue of Halo<\/em>\u2019s Master Chief. Upstairs, an equally large replica of the Xbox Series X console is covered in its creators\u2019 signatures.<\/p>\n At the design lab, staff members use massive 3D printers to manufacture design concepts for Xbox components. They also create 3D renderings of different hand and head sizes to study how controllers might fit and weigh in a player\u2019s grip, or how a headset will feel.<\/p>\n Sharma said she has no timeline for how long she expects to be Xbox\u2019s CEO. <\/p>\n Back at her office on this brisk September afternoon, I\u2019m scheduled to tour the lab with her. A company shuttle arrives to take us there.<\/p>\n Before getting up, I prod her once more on the big question: Will Xbox be a Microsoft division two years from now?<\/p>\n \u201cI think that we\u2019re going to be an important part of Microsoft for a very long time,\u201d she said.<\/p>\n<\/div>\n #nongamer #CEO #racing #save #Microsofts #Xbox<\/p>\n","protected":false},"excerpt":{"rendered":" Asha Sharma returns from one o… <\/p>\n","protected":false},"author":1,"featured_media":7153,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[283,756,7064,663,2181,2182,10240,10241,4388,86,6416,10242],"class_list":["post-7152","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-news","tag-ceo","tag-fortune-500-companies","tag-gaming","tag-microsoft","tag-microsoft-xbox","tag-microsofts","tag-nintendo","tag-nongamer","tag-racing","tag-save","tag-sony-playstation","tag-xbox"],"yoast_head":"\n![\"\"](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2026\/10\/XBOX_Asha-Sharma-social-thumbnail.jpg?format=webp&w=1440&quality=75\"\/)
<\/div>A storied franchise\u00a0<\/h3>\n
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<\/div>Sharma\u2019s plan<\/h3>\n
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<\/div>AI background<\/h3>\n
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<\/div>Does Microsoft want Xbox?<\/h3>\n
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<\/div>Will Sharma\u2019s plan work?<\/h3>\n
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