Jun 19, 2026 · 10 min · 10 segments
Xbox made headlines this week when news broke about three Xbox Studios potentially being shuttered. Asha Sharma had sent an internal memo to employees last week about Xbox's 3% profit loss and how the…
Last week, Bloomberg's Jason Schreier had reported that Xbox's new CEO Asha Sharma had sent out an email to employees that the company had dropped to a 3% accountability margin, or profit margin.
In that email Sharma had stated excluding Activision Blizzard King over the past five years, we have spent over $20 billion on ongoing investments in our content platform and hardware subsidy.
Sharma also spoke on the hardware difficulties with Xbox having to pay five times as much for storage and memory parts for their next gen console code named Helix.
Xbox is unable to make as many consoles as players want to buy, but Sharma is committed to Helix and is strategizing for a new business model to push hardware.
In that same email, Sharma also said, for some of you, these realities will be surprising and even frustrating to discover.
We won't succeed by hiding her truths, nor will we succeed by doing the same thing and expecting different results.
Now, Sharma never specifically mentioned layoffs in that particular email, but at this point in the industry, I don't think that really needs to be said after an update like that.
She did, however, point out that Xbox chose to expand their studios list when the company needed more content to push its streaming and subscription strategies.
Sharma admitted that Xbox had not properly funded these industry defining franchises to compete and win and that they need to reassess the balance between first- and third-party exclusives and new IP and their investment priorities for the next five years.
Last week, Bloomberg's Jason Schreier had reported that Xbox's new CEO Asha Sharma had sent out an email to employees that the company had dropped to a 3% accountability margin, or profit margin.
In that email Sharma had stated excluding Activision Blizzard King over the past five years, we have spent over $20 billion on ongoing investments in our content platform and hardware subsidy.
Sharma also spoke on the hardware difficulties with Xbox having to pay five times as much for storage and memory parts for their next gen console code named Helix.
Xbox is unable to make as many consoles as players want to buy, but Sharma is committed to Helix and is strategizing for a new business model to push hardware.
In that same email, Sharma also said, for some of you, these realities will be surprising and even frustrating to discover.
We won't succeed by hiding her truths, nor will we succeed by doing the same thing and expecting different results.
Now, Sharma never specifically mentioned layoffs in that particular email, but at this point in the industry, I don't think that really needs to be said after an update like that.
She did, however, point out that Xbox chose to expand their studios list when the company needed more content to push its streaming and subscription strategies.
Sharma admitted that Xbox had not properly funded these industry defining franchises to compete and win and that they need to reassess the balance between first- and third-party exclusives and new IP and their investment priorities for the next five years.
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