Amid all the problems that besiege Microsoft’s Xbox division, the studio divestitures, the layoffs, the declining business, and even the loss of a few million Game Pass subscribers, lies one lingering question: what actually is Xbox? A platform or the biggest third-party publisher?
Microsoft certainly tried its damnedest to confuse consumers with its constantly shifting strategy regarding first-party content, as well as the delirious “This Is an Xbox” campaign. Xbox CEO Asha Sharmaquickly tossed it in the trash after taking over from Phil Spencer, seeking a return to the brand’s core values. But even she admitted that there’s a fundamental tension between being a publisher and a platform that’s far from easy to solve.
As the industry reflects on the aftermath of the Xbox layoffs and divestitures, two former industry execs, one from Sony and one from Xbox, have spoken on the matter and agree that Microsoft must simply choose one or the other.
Shawn Layden, who worked at Sony for over thirty years in roles such as President and CEO of PlayStation America and then Chairman of Sony Worldwide Studios, told Eurogamer that, in a way, being a successful platform also implies not necessarily strangling the other publishers.
There’s two roads. To be a competitive platform rival in the marketplace with PlayStation, or the biggest game publisher in the world, which, based on all their acquisitions, they’re either there or they’re very close to it. But those two roads do not converge. Those two roads necessarily diverge, because to be a platform and to be a very well-supported, well-accepted, well-selling platform, you need exclusive content. Nintendo needs its Mario and its Zelda, and PlayStation needs Crash Bandicoot and Astro Bot, and Kratos and Horizon, all of that.
But if you’re going to be the biggest publisher in the world, which is not a bad ambition – I’m sure there’s gold on them there hills – you have to bring your stuff on every platform. Multi-platform is almost a prerequisite. As a first-party platform, our job was almost not to be the biggest game publisher in the world. In fact, it was against our interest to start muscling our partners out of the pie. We weren’t there to steal; I wasn’t making <a href="https://comicvibe.com/top-11-nft-games-to-play-in-july-2026/” title=”Top 11 NFT games to play in July 2026″>games so I could steal market share from EA or steal market share from Activision. My job was to make games that made the pie bigger, and my opportunity was in growing it out.
Much the same principle was outlined in a post submitted on GamesBeat by Jon Kimmich, a longtime games industry executive and advisor who helped shape Microsoft’s original Xbox-era portfolio. He was a Lead Product Planner at Microsoft Games Studios during the conception and launch of the first Xbox, and is credited with helping secure franchises including Bungie’s Halo and FASA’s BattleTech for Microsoft. He left Microsoft in 2004 to become a producer and director of business development at Day 1 Studios, which worked on titles including MechAssault 2, the console versions of F.E.A.R., and Fracture. Since 2009, he has run Software Illuminati, advising game developers, publishers, and technology companies.
According to Kimmich, Microsoft cannot hope to simultaneously be the Netflix of games with Game Pass, a PlayStation-like console platform, a Steam competitor with the Xbox app, and a large-scale third-party publisher, as some of those goals inevitably conflict.
Xbox must decide what it is. A platform? A publisher? A subscription service? A hardware business? An entertainment ecosystem? It can be more than one thing, but it cannot be all things at once, behaving as if all those missions are always equally true, all the time. It cannot simultaneously be the Netflix of games, a Sony-style console platform, a Steam competitor, a mobile cloud entrant, and a Disney-scale IP publisher without deciding which of those jobs actually pays for the others.
Neither Layden nor Kimmich is arguing that Xbox must abandon publishing, subscriptions, PC, cloud, or hardware altogether. The point is that the company has to establish a proper hierarchy: one clear business at the center, with the others serving it rather than pulling it apart.
For far too long, Xbox has tried to portray every pivot as additive. Exclusives matter, until they do not. Consoles matter, but every device is an Xbox. Game Pass is the future, except premium game sales and multiplatform publishing are also the future. Long story short, Microsoft has never convincingly explained how these priorities coexist without undermining one another.
Asha Sharma has inherited a division in desperate need of that answer. Cutting studios and laying off thousands of employees may improve a spreadsheet in the short term, but none of that tells players, developers, or partners why Xbox exists. Until Microsoft decides whether Xbox is primarily a platform built around hardware and exclusive content, or a publisher whose games need to be everywhere, the brand will remain stuck in an identity crisis that is costly in both financial resources and human talent.
About the author: With over two decades of experience in gaming journalism, Alessio Palumbo has led the gaming vertical at Wccftech since August 2015. He started working at a young age for Italian websites like Everyeye.it, Gamestar.it, Nextgame.it, and Multiplayer.it before kickstarting the indie English-language publication Worlds Factory as its founder and Editor in Chief.
In the last decade, he has coordinated the overall output of Wccftech’s gaming section, managed PR relations, assigned reviews, produced daily news coverage, edited gaming content as needed, and delivered game reviews.
Arguably, his trademark content is the long series of exclusive developer interviews that have been cited by Wikipedia and by the biggest news media and gaming publications.
His passion for technology also makes him knowledgeable when it comes to gaming hardware and tech. His favorite genres include RPGs, MMORPGs, and action/adventure games.
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