Xbox CEO Asha Sharma told staff in an internal memo that Xbox will return to player and revenue growth by the end of fiscal year 2027 — which runs through June 2027 — and will improve profits back in line with industry averages The Verge. The memo, obtained by The Verge, is the most detailed public account of Sharma's strategic vision since she took charge of Microsoft's gaming division in February 2026, following Phil Spencer's retirement as head of Microsoft Gaming Reuters.

Sharma built the plan around four priorities for fiscal year 2027. CORE means strengthening the platform, led by console. CONTENT means growing games into global franchises. CREATION means making Minecraft the world's creator platform. CONNECTION means extending the worlds that fans love into new areas. She stated that every function and studio will own part of the growth outcome.

The memo also laid out a three-stage framework for measuring progress. Stage 1 is returning to growth by end of FY2027. Stage 2 is turning bets into growth during FY2028 and FY2029. Stage 3 is scaling what works by FY2030. By fiscal year 2030, the stated ambition is to be halfway to Xbox's long-term daily-player goal, with sustained double-digit growth in players and engagement, and industry-leading margins.

Sharma shared that Xbox currently brings together more than 100 million people every day, more than 500 million each month, and nearly one billion each year. She said the console generates the majority of Xbox revenue and remains the foundation of Xbox fandom and its flagship experience. The console, Xbox's operating system, Game Pass (Microsoft's subscription service for games), Windows, and streaming are positioned collectively as the platform for new players and developers.

On the content side, Sharma said Xbox is shifting its studio system from a decentralized model — where individual studios operate with a high degree of autonomy — to one more focused around its strongest franchises and biggest new ideas. Three Xbox franchises already generate more than $1 billion annually, though she did not specify which ones. Xbox plans to lean on Candy Crush-maker King and Microsoft Casual Games to grow its share in casual games, and Sharma said Xbox will invest in Minecraft more than ever before. The company will also build long-term plans for its biggest franchises across film, television, consumer products, sponsorship, live experiences, and new global partnerships including China.

The memo arrives roughly six months into Sharma's tenure and follows a turbulent stretch for the gaming division. In early July, Microsoft cut 4,800 jobs, including many at Xbox, marking the first major restructuring under Sharma as CEO AP News. In a memo addressing the layoffs, Sharma wrote: "Our business today is not healthy" AP News. Prior to the cuts, Reuters reported in June that Microsoft had considered spinning off Xbox, according to a report by The Information Reuters. The same reporting noted that Sharma plans to increase spending to accelerate development of new Xbox titles.

Game Pass has also undergone pricing and packaging changes under Sharma. In April 2026, Xbox Game Pass Ultimate was cut to $22.99 per month from $29.99, and PC Game Pass was priced at $13.99 per month. At the same time, Call of Duty day-one inclusions were removed from the service Reuters. In other words, subscribers no longer get access to new Call of Duty releases on launch day.

The combination of a price cut on the flagship subscription tier, the removal of a major day-one draw, and the explicit acknowledgment that the business is "not healthy" creates a picture of a unit in active repositioning rather than steady-state execution. Sharma's memo now attaches specific milestones to that repositioning. The question is whether the four-pillar structure and the three-stage timeline can convert operational discipline into the growth metrics she has committed to.

The broader context here is the structural tension embedded in the plan. The CORE pillar reaffirms console as the platform's foundation and primary revenue source, while the CONTENT and CONNECTION pillars push investment toward franchise expansion across non-gaming media and casual gaming. Sharma is simultaneously asking the organization to focus — concentrating studios around strongest franchises — and to broaden, through casual games, the Minecraft creator platform, transmedia IP, and China partnerships. Whether focus and breadth are compatible within the FY2027 window she has set is the operational question the memo leaves unanswered.

The studio reorganization is also notable for what it implies about the decentralized model Xbox has operated under since the Activision Blizzard acquisition integrated a large portfolio of independent studios. Moving away from decentralization toward franchise-centric alignment is a structural change that will test execution across dozens of teams, and the memo's pledge that every function and studio will own part of the growth outcome suggests accountability will be distributed but measured against shared targets.

For developers and platform watchers, the positioning of Xbox's OS, Game Pass, Windows, and streaming as a unified platform layer is the element most likely to shape the ecosystem's technical and commercial trajectory. If Game Pass pricing stabilizes at the April levels and the studio reorganization produces a steadier release cadence, the subscription service's value proposition enters a new phase. The removal of Call of Duty day-one access, however, means that proposition now rests on catalog depth and platform integration rather than on marquee launch-day inclusion.

Sharma's memo does not address the spin-off speculation directly, nor does it reference the Game Pass pricing changes. What it does is establish a public scorecard. By the end of FY2027, Xbox has committed to growth in players and revenue, and to margins in line with industry averages. The three-stage roadmap extends that commitment through 2030, with the ambition of sustained double-digit growth and industry-leading margins. The targets are now on record. The execution timeline is underway.