Nadella Backs Xbox Streamlining as Layoffs and Studio Shake‑Up Continue
His comment signals Microsoft wants a smaller, lower‑cost Xbox that can return to growth next fiscal year.
Overview
- On Monday, CEO Satya Nadella publicly praised the 'streamlining' led by Xbox chief Asha Sharma and said Xbox must invent a sustainable business model to reach more players.
- Xbox has announced plans to cut about 3,200 roles by the end of fiscal 2027 and carried out another round of roughly 268 layoffs last week.
- Microsoft is reassigning and merging first‑party teams, including moving Halo oversight to Activision, placing Obsidian under Bethesda, and combining Playground Games with Turn 10 while Rare and World's Edge shifted into Activision's organization.
- Xbox chief content officer Matt Booty said two proposed deals for Ninja Theory fell through and that consultation on a proposed closure will begin, with consultation about Arkane's future still ongoing.
- Executives say the changes aim to reduce costs and return Xbox to growth next year, but developers and observers warn the moves risk talent loss, lost institutional knowledge, and delays to the games release pipeline.