Fresh off a Games Showcase weekend spent winning fans back, XBOX is getting surprisingly candid about the state of its business. CEO Asha Sharma and chief content officer Matt Booty published a memo titled Next 100 Days: XBOX Reset to XBOX Wire today, a message the company says was just sent to Team XBOX employees globally. It lays out five realities the company needs to navigate, and some of the numbers are rough.
The first half of the memo recaps Sharma’s first 100 days since taking over from Phil Spencer in February. The pair say XBOX has shipped more platform updates in the past 100 days than in the prior year combined, that Game Pass has returned to growth after more than eight months of decline, and that the company now has more active partners than ever, along with a 24/7 Player Voice channel for hearing directly from players. They also point to the Games Showcase and the return of FanFest, plus the reintroduction of exclusives with Gears of War: E-Day in 2026 and Clockwork Revolution in 2027, promising signature exclusives every year going forward. Playground Games also gets a shoutout for proving established franchises can hit “incredible new highs,” a clear nod to Forza Horizon 6, which I said came damn close to being the perfect racing game for me in my review.
From there, the memo shifts into the realities leadership says it must confront, and the numbers don’t lie. XBOX expects to end this fiscal year at about a 3 percent accountability margin, down year over year. Excluding Activision Blizzard King, the company has spent over $20 billion on content, platform, and hardware subsidies over the past five years while annual revenue declined by nearly half a billion. “Going forward, this cannot continue,” the memo states.
The hardware section is where the memo gets most specific about just how much trouble XBOX is navigating. When Sharma joined in February, XBOX was paying over twice as much for console storage components as it had last fall. Those costs have since doubled again, and as the company plans for the 2027 holiday season, it expects to be paying over five times the prices of just two years earlier, with memory costs following a similar trajectory. XBOX admits it currently cannot build as many consoles as players want to buy and says it needs a new business model and partnerships for hardware, while remaining committed to Project Helix, the codename for its next generation console.
The remaining realities cover an overextended studio system and platform infrastructure that leadership admits is not built for the battle ahead. The memo concedes XBOX has not adequately funded its industry-defining franchises to compete and win, that its systems span hundreds of dependencies and lean too heavily on vendors, and that the company will look at potential M&A to help it win across hardware, PC, mobile, and streaming. Sharma and Booty acknowledge these realities will be surprising and even frustrating for some employees to discover, but argue XBOX won’t succeed by hiding hard truths. After a weekend of crowd-pleasing announcements, the harder part starts now.
