Microsoft published its FY2026 Q4 earnings report yesterday, and as expected, the Xbox business once again underperformed. Xbox hardware revenue was down 13% year over year, while Xbox content and services revenue was down 10%.
We’re right in the middle of the “reset” of the Xbox business that new CEO Asha Sharma announced ahead of a brutal round of layoffs earlier this month. In a new memo shared with employees seen by The Verge, Sharma detailed four new priorities to set the Xbox business on the path to success during Microsoft’s new fiscal year, which will end in June 2027.
Here are the four Xbox priorities for the next 12 months Sharma listed in her memo:
CORE: Strengthen our platform, led by console
CONTENT: Grow great games into global franchises
CREATION: Make Minecraft the world’s creator platform
CONNECTION: Extend the worlds that fans love
The new Xbox CEO is used to setting bold new priorities for the business. In a previous “We Are Xbox” memo from April 23, 2026, the new leadership team listed a slightly different set of four priorities for Xbox: Hardware, Content, Experience, and Services. Anyway, with these new four C’s, the focus on growing the console user base, attracting developers and creators, and building on Microsoft’s successful gaming IPs is still there.
In her latest memo, Sharma said that she will evaluate how it executed on these four new priorities in three ways: Microsoft’s first objective is to see growth return before the end of its current fiscal year in June 2027. Secondly, Sharma said that “in FY28 and FY29, our Four C’s and roadmap must move into businesses producing meaningful player value and revenue acceleration.”
Lastly, Sharma’s third objective is to “be halfway to our long-term daily-player goal with sustained double-digit growth in players and engagement and industry-leading margins“ by fiscal year 2030. To be clear, Microsoft’s player goal is half a billion daily players by 2030. In her memo, however, Sharma said that Xbox only has over 100 million daily active users, over 500 million monthly active users, and nearly 1 billion yearly active users.
It’s hard not to wonder if Sharma is just aiming way too high with her activity and financial goals, considering that Microsoft has been in third place in the console market for many years. Sharma acknowledged that Microsoft’s console business “generates the majority of Xbox revenue and remains the foundation of our fandom.” However, it’s not clear yet how a potentially very expensive next-gen Xbox console can help to grow that part of the business.
You may remember how the pandemic led Microsoft to expect Game Pass to reach 100 million subscribers, but that number has dropped from 32 million in February 2024 to 30 million today, according to The Wall Street Journal (https://www.wsj.com/tech/microsoft-layoffs-xbox-59e7f6df?st=PDtsc4). Obviously, Asha Sharma has been given the Xbox CEO job to shake things up and try a new strategy to make the business healthier. However, even Phil Spencer back in the day had a very pessimistic outlook on the future of the Xbox console business.
“We lost the worst generation to lose, where everybody built their digital library of games,” Spencer said in a May 2023 interview, referring to the Xbox One/PlayStation 4 generation.
Tagged with
- Xbox
- Asha Sharma
Share post
`;i&&(a=`${a}
`),e.insertAdjacentHTML(n,a)}return document.getElementById(t)}_repeatDynamicAds(t){let n=[],r=t.location===e.Recipe?99:this.locationMaxLazySequence.get(t.location),i=t.lazy?k(r,0):0,a=t.max,o=t.lazyMax,s=i===0&&t.lazy?a+o:Math.min(Math.max(i-t.sequence+1,0),a+o),c=Math.max(a,s);for(let e=0;e=a,o=r;t.name===`Recipe_1`&&r>=5&&(o=r+1),n.push({…t,sequence:o,lazy:i})}return n}_locationEnabled(e){let t=this._clsOptions.enabledLocations.includes(e.location),n=this._clsOptions.disableAds&&this._clsOptions.disableAds.all||document.body.classList.contains(`adthrive-disable-all`),r=!document.body.classList.contains(`adthrive-disable-content`)&&!this._clsOptions.disableAds.reasons.has(`content_plugin`);return t&&!n&&r}},Et=class{constructor(){s(this,`_map`,[])}add(e,t,n,r=document){this._map.push({el:e,coords:t,dynamicAd:n,target:r})}addSorted(e,t,n,r=document){let i=this._upperBoundIndex(t);this._map.splice(i,0,{el:e,coords:t,dynamicAd:n,target:r})}get map(){return this._map}sort(){this._map.sort(({coords:e},{coords:t})=>e-t)}filterUsed(){this._map=this._map.filter(({dynamicAd:e})=>!e.used)}findNeighborIndices(e){let t=this._upperBoundIndex(e);return[t-1>=0?t-1:null,t>>1;this._map[r].coords{let t=ne(),n=T(),r=e.siteAdsProfiles,i=null;if(r&&r.length)for(let e of r){let r=e.targeting.device,a=e.targeting.browserEngine,o=r&&r.length&&r.includes(n),s=a&&a.length&&a.includes(t);o&&s&&(i=e)}return i},kt=e=>{let t=Ot(e);if(t){let e=t.profileId;document.body.classList.add(`raptive-profile-${e}`)}},$={Video_Collapse_Autoplay_SoundOff:`Video_Collapse_Autoplay_SoundOff`,Video_Individual_Autoplay_SOff:`Video_Individual_Autoplay_SOff`,Video_Coll_SOff_Smartphone:`Video_Coll_SOff_Smartphone`,Video_In_Post_ClicktoPlay_SoundOn:`Video_In-Post_ClicktoPlay_SoundOn`,Video_Collapse_Autoplay_SoundOff_15s:`Video_Collapse_Autoplay_SoundOff_15s`,Video_Individual_Autoplay_SOff_15s:`Video_Individual_Autoplay_SOff_15s`,Video_Coll_SOff_Smartphone_15s:`Video_Coll_SOff_Smartphone_15s`,Video_In_Post_ClicktoPlay_SoundOn_15s:`Video_In-Post_ClicktoPlay_SoundOn_15s`};var At=class{get enabled(){throw Error(`Enablement must be defined at factory creation time.`)}};let jt=(e=navigator.userAgent)=>E(e)===`desktop`;var Mt=class extends At{constructor(e,t,n){super(),this._videoConfig=e,this._component=t,this._context=n,s(this,`_potentialPlayerMap`,void 0),s(this,`_device`,void 0),s(this,`_stickyRelatedOnPage`,!1),s(this,`_relatedMediaIds`,[]),this._device=jt()?`desktop`:`mobile`,this._potentialPlayerMap=this.setPotentialPlayersMap()}setPotentialPlayersMap(){let e=this._videoConfig.players||[],t=this._filterPlayerMap();return t.stationaryRelated=this._getPotentialStationaryPlayers(e,t.stationaryRelated),this._potentialPlayerMap=t,this._potentialPlayerMap}_getPotentialStationaryPlayers(e,t){let n=new Set(t);return e.forEach(e=>e.type===`stationaryRelated`&&e.enabled&&n.add(e)),[…n]}_filterPlayerMap(){let e=this._videoConfig.players,t={stickyRelated:[],stickyPlaylist:[],stationaryRelated:[]};return e&&e.length?e.filter(e=>{var t;return(t=e.devices)==null?void 0:t.includes(this._device)}).reduce((e,t)=>{if(e[t.type]||(P.event(this._component,`constructor`,`Unknown Video Player Type detected`,t.type),e[t.type]=[]),t.enabled){let n=t.type;this._videoConfig.shouldDisableStickyRelated&&t.type===`stickyRelated`&&(n=`stationaryRelated`),e[n].push(t)}return e},t):t}_checkPlayerSelectorOnPage(e){for(let t of this._potentialPlayerMap[e]){let e=this._getPlacementElement(t);if(e)return{player:t,playerElement:e}}return{player:null,playerElement:null}}_getOverrideElement(e,t,n){if(e&&t){let r=document.createElement(`div`);t.insertAdjacentElement(e.position,r),n=r}else{let{player:e,playerElement:t}=this._checkPlayerSelectorOnPage(`stickyPlaylist`);if(e&&t){let r=document.createElement(`div`);t.insertAdjacentElement(e.position,r),n=r}}return n}_shouldOverrideElement(e){let t=e.getAttribute(`override-embed`);return t===`true`||t===`false`?t===`true`:this._videoConfig.relatedSettings?this._videoConfig.relatedSettings.overrideEmbedLocation:!1}_checkPageSelector(e,t,n=[]){return e&&t&&n.length===0?(window.location.pathname!==`/`&&P.event(`VideoUtils`,`getPlacementElement`,Error(`PSNF: ${e} does not exist on the page`)),!1):!0}_getElementSelector(e,t,n){return t&&t.length>n?t[n]:(P.event(`VideoUtils`,`getPlacementElement`,Error(`ESNF: ${e} does not exist on the page`)),null)}_getPlacementElement(e){let{pageSelector:t,elementSelector:n,skip:r}=e,{valid:i,elements:a,…o}=N(t),{valid:s,elements:c,…l}=M(n);return t!==“&&!i?(P.error(`VideoUtils`,`getPlacementElement`,Error(`${t} is not a valid selector`),o),null):s?this._checkPageSelector(t,i,a)&&this._getElementSelector(n,c,r)||null:(P.error(`VideoUtils`,`getPlacementElement`,Error(`${n} is not a valid selector`),l),null)}_getEmbeddedPlayerType(e){if(this._videoConfig.shouldDisableStickyRelated)return`static`;let t=e.getAttribute(`data-player-type`);return(!t||t===”default”)&&(t=this._videoConfig.relatedSettings?this._videoConfig.relatedSettings.defaultPlayerType:`static`),this._stickyRelatedOnPage&&(t=`static`),t}_getMediaId(e){let t=e.getAttribute(`data-video-id`);return t?(this._relatedMediaIds.push(t),t):!1}_getOrientation(e){return e.getAttribute(`orientation`)===`vertical`?`vertical`:`horizontal`}_createRelatedPlayer(e,t,n,r,i){t===`collapse`?this._createCollapsePlayer(e,n):t===`static`&&this._createStaticPlayer(e,n,r,i)}_createCollapsePlayer(e,t){let{player:n,playerElement:r}=this._checkPlayerSelectorOnPage(`stickyRelated`),i=n||this._potentialPlayerMap.stationaryRelated[0];i&&i.playerId&&!this._videoConfig.shouldDisableStickyRelated?(this._shouldOverrideElement(t)&&(t=this._getOverrideElement(n,r,t)),t=document.querySelector(`#cls-video-container-${e} > div`)||t,this._createStickyRelatedPlayer({…i,mediaId:e},t)):P.error(this._component,`_createCollapsePlayer`,`No video player found`)}_createStaticPlayer(e,t,n,r){if(this._potentialPlayerMap.stationaryRelated.length&&this._potentialPlayerMap.stationaryRelated[0].playerId){let i=this._potentialPlayerMap.stationaryRelated[0];this._createStationaryRelatedPlayer({…i,mediaOrPlaylistId:e,orientation:r},t,n)}else P.error(this._component,`_createStaticPlayer`,`No video player found`)}_shouldRunAutoplayPlayers(){return!!(this._isVideoAllowedOnPage()&&(this._potentialPlayerMap.stickyRelated.length||this._potentialPlayerMap.stickyPlaylist.length))}_setPlaylistMediaIdWhenStationaryOnPage(e,t){if(this._potentialPlayerMap.stationaryRelated.length&&this._potentialPlayerMap.stationaryRelated[0].playerId&&e&&e.length){let n=e[0].getAttribute(`data-video-id`);return n?{…t,mediaId:n}:t}return t}_determineAutoplayPlayers(e){let t=this._component,n=t===`VideoManagerComponent`,r=this._context;if(this._stickyRelatedOnPage){P.event(t,`stickyRelatedOnPage`,n&&{device:r&&r.device,isDesktop:this._device}||{});return}let{playerElement:i}=this._checkPlayerSelectorOnPage(`stickyPlaylist`),{player:a}=this._checkPlayerSelectorOnPage(`stickyPlaylist`);a&&a.playerId&&i?(a=this._setPlaylistMediaIdWhenStationaryOnPage(e,a),this._createPlaylistPlayer(a,i)):Math.random(){P.event(t,`noStickyPlaylist`,n&&{vendor:`none`,device:r&&r.device,isDesktop:this._device}||{})},1e3)}_initializeRelatedPlayers(e){let t=new Map;for(let n=0;n{let e=new c;!e||!e.enabled||(e.siteAds&&kt(e.siteAds),new Tt(e,new Dt).start(),new Nt(new fe(e),e).init())})()}catch(e){P.error(`CLS`,`pluginsertion-iife`,e),window.adthriveCLS&&(window.adthriveCLS.injectedFromPlugin=!1)}})();
