Overview
- In late July, Sharma circulated a leaked memo that sets a three-stage plan to return Xbox to player and revenue growth by the end of fiscal 2027 and to scale results through FY30.
- Microsoft reported a $1.7 billion, roughly 7 percent, decline in Xbox revenue for FY26 driven by lower content and services sales and a 29 percent drop in hardware revenue.
- Sharma said more than 200 million new players joined Xbox in FY26 but that audience growth failed to increase revenue, and she made every team and studio responsible for the turnaround.
- The memo frames four priorities — Core (console-led platform), Content (turn games into global franchises), Creation (make Minecraft a creator platform), and Connection (extend fan worlds) — and signals further studio reorganizations and cost cuts.
- Unresolved monetization issues include Game Pass shortfalls and marketplace concerns such as Project Helix, and Microsoft will track FY27 performance to see if the reset closes the gap between reach and revenue.