Almost two months after taking the helm at Xbox, Asha Sharma and Matt Booty have set the course for the future. The company intends to expand into China as well as other markets, and aims to return the business to sustainable growth. Daily Active Users are now the most important metric.
The recent price adjustment for Xbox Game Pass is just the beginning. Asha Sharma (Executive Vice President and CEO of Microsoft Gaming) and Matt Booty (Executive Vice President and Chief Content Officer of Microsoft Gaming) have published a joint message sent to Team Xbox employees worldwide. They began by highlighting that Xbox has over 500 million players worldwide and boasts some of the most important entertainment franchises like Forza, Gears of War, Halo, Call of Duty, Warcraft, Diablo and more. "From the beginning, Xbox was built by people willing to try things that others wouldn't. We placed a consumer bet inside an enterprise company because we believed gaming would define the living room, and we were at risk of missing it. That spirit has carried us through the last 25 years, and it is required to carry us forward," they write.
However, they subsequently noted that their players were frustrated. New feature drops on console have been less frequent, their presence on PC isn't "strong enough", and pricing is becoming more difficult for people to keep up with. "And core experiences like search, discovery, social, and personalization still feel too fragmented. Developers and publishers are asking for more, too: better tools, better insights, and a platform that helps them grow faster," Sharma and Booty say. They also emphasise that a new generation of players is coming (online) with different expectations, and that everything else is competing for their attention too. "They expect more content in familiar places, want to shape the worlds they play in, and want to create and socialize together, not just play together."
"The industry is becoming global and competitive. More than half of the market's revenue, players, and growth are happening outside of our core markets. But the rest of the world is not just a large market. Developers there are increasingly competing with the most established Western studios, combining scale, speed, and a willingness to reinvent genres many once considered mature. The model that got us here won't be the one that takes us forward."
They want to respond to all this and make Xbox a global platform that connects players and creators everywhere. The foundation of this is the console, which will provide a premium experience, and the cloud will make this experience available on any device. "You can play where you want, and your games, progress, friends, and identity stay with you across console, PC, mobile, and cloud. Xbox will be built to be affordable, personal, and open." 'Flexible pricing' is mentioned, but the most important metric for them will be "Daily Active Players. To achieve this, they will focus on four areas: hardware, content, experience, and services.
They intend to stabilise Gen 9 as a healthy foundation (Xbox Series X|S), while Project Helix (the next Xbox) is going to lead the way in terms of performance, and enable users to play both console and PC games. The aim is to build a strong ecosystem that expands choice and reach. In the content sector, they want to grow and extend their portfolio of popular franchises, maintain and grow their live games (long-term stewardship), and strengthen their third-party partnerships and five-year slate. Expanding into China, emerging markets, and mobile-first audiences is also on the agenda. They also intend to enhance creator-centric platforms such as Minecraft, The Elder Scrolls, and Sea of Thieves.
Regarding the user experience, they want to fix the fundamentals for players and partners. Discovery, customisation, social features and personalisation to connect the community are to be overhauled. In the service sector, the focus will be on strengthening the Game Pass, with "clear differentiation and sustainable economics". However, they also want to pay attention to costs. Asha Sharma and Matt Booty: "Return the business to durable growth with strong cost discipline." No mention was made of any potential studio restructuring or layoffs. In the cloud sector, they are to ensure that cloud play feels 'native, fast and reliable' across TVs and low-cost devices. M&A is being considered to accelerate growth where organic paths are too slow.
It is still to be evaluated whether and how they will return to exclusive games. "Along the way, we will reevaluate our approach to exclusivity, windowing, and AI, and share more as we learn and decide," the two says.
