Xbox CEO Fires 3,200 Staff, Then Promises a Billion Daily

Roughly 1,600 people lost their jobs today. Four studios are being spun out or sold. Xbox's new CEO called the business "not healthy" and announced the most sweeping restructure the division has ever undergone. And then, in the very same letter, Asha Sharma declared that she wants Xbox to entertain more than a billion people every single day.

Let that number sit for a second. A billion daily users. Fortnite's all-time peak during the OG map relaunch in November 2023 was 44.7 million. Roblox hit its record of 47.4 million concurrent players last year. Steam's all-time concurrent peak was 41 million. You could stack all three of those records on top of each other, assume zero overlap, and you'd still be at roughly 13% of Sharma's target. I don't know what internal projections make that number feel achievable, but from the outside, it borders on fantasy.

The full quote, from an internal email reviewed by IGN and later shared publicly, reads:

"I want XBOX to be one of the few companies that entertains more than a billion people each day and gives everyone the opportunity to create and connect. I know we can achieve this goal. XBOX has many of the most beloved franchises in entertainment history, talented studios around the world, and we will return to growth in 2027."

Sharma's letter is blunt about the state of the business. She says Xbox is "operating at margins that are 3 to 10x lower than comparable platform and publishing businesses," that Game Pass and multi-platform expansion "did not grow at the pace we expected," and that the industry is facing "the most severe hardware crisis in its history." It's a frank diagnosis. But the prescription, a workforce reduction of roughly one-fifth of Xbox's staff followed by an aspiration that dwarfs anything any gaming company has ever achieved on a daily basis, creates a disconnect so jarring it's hard to take the closing paragraph seriously.

Where the bodies fall

The restructure itself is sweeping. Compulsion Games (South of Midnight) and Double Fine Productions (Psychonauts) will return to independent management, retaining their IP and catalogs. Ninja Theory (Hellblade) and Undead Labs (State of Decay) have entered terms to join new, unnamed owners, with funding to complete their current projects. Arkane, the Marvel's Blade developer, faces a consultation process under French labour law to "review potential strategic options," which could mean a sale or spinoff. Layoffs are also hitting Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and Xbox Game Studios. Microsoft says no publicly announced first-party games are being cancelled, so Fable, Gears of War: E-Day, The Elder Scrolls 6, and Call of Duty: Modern Warfare 4 remain on track.

A recent report from The Information, corroborated by Reuters, claimed Microsoft had considered spinning Xbox out entirely, possibly as a subsidiary, a joint venture, or even selling it. Sharma reportedly wants to accelerate development on new Halo, Fallout, and Elder Scrolls entries as part of this reset. The strategy is clear: shed the smaller studios, double down on the mega-franchises, and hope the blockbusters carry everything.

The only plausible path to anything resembling a billion daily users runs through King. Candy Crush has been downloaded over 3.6 billion times and reportedly pulls in over 100 million daily active users. If you add Minecraft's massive install base, Game Pass subscribers, and every other Xbox-adjacent service, you can start to see the outline of the math Sharma might be doing. But even that generous accounting gets you maybe a fifth of the way there. And counting someone matching candy on their phone as an "Xbox user" is a pretty elastic definition of what Xbox is supposed to be.

What frustrates me about this is the sequencing. You can make a case for painful restructuring. You can argue that Xbox was bloated, that margins were unsustainable, that tough calls had to be made. Some of those arguments might even be right. But closing out a letter that eliminates 3,200 jobs with a promise so extravagant it would make a startup pitch deck blush undermines whatever credibility the rest of the message was trying to build. The people who just lost their livelihoods don't need to hear that their former employer is shooting for a number that would require 24 Steams running at peak capacity simultaneously. They need to hear that the cuts were necessary and that leadership understands the gravity of what just happened. Instead, they got a moonshot slogan.

Xbox says it will return to growth in 2027. Given that the layoffs themselves are scheduled to continue through the end of fiscal year 2027, those two timelines are going to be running in parallel for a while.