Xbox Reports First-Party Growth Following Strategic Reset

Xbox CEO Asha Sharma reportedly informed staff during an internal town hall on Tuesday that the company has begun to see a return to growth in its first-party gaming sector after hitting an all-time low. This update comes amidst a period of significant structural changes for the brand, which has involved widespread layoffs and the reorganization of several major studios.

Assessing the Xbox Reset

According to reports from Windows Central, Sharma addressed the decline in engagement, player count, and revenue that Xbox faced at the start of the year. While the brand initially struggled with what leadership described as a “freefall” due to its previous Game Pass strategy, the company now claims to have stabilized hours spent by players. Sharma noted that first-party game growth is now “more than two to three times” what it was during the nadir of its recent performance, though specific raw data was not provided.

Strategic Shifts and Future Outlook

To pivot away from the declines, Xbox has implemented a series of aggressive restructuring moves. This included consolidating various studios, such as moving Halo and Rare under the Activision umbrella and merging Forza developers Turn 10 and Playground Games. Despite the internal turbulence, leadership remains optimistic about the current trajectory, citing strong starts for titles like Gears of War: E-Day, Minecraft Dungeons 2, and World of Warcraft Forever. Sharma also suggested that future iterations of the Game Pass service may become more “flexible” to better accommodate a broader player base, aiming for a long-term goal of reaching one billion daily active users.

Why it matters

For the average gamer, these internal shifts signal a fundamental change in how Xbox approaches its ecosystem and subscription model. If the company is indeed moving toward a more “flexible” Game Pass strategy, players should watch for potential changes in tier structures or service accessibility in the coming months.

While the company points to a 30% increase in positive brand sentiment, the reality for players remains tied to the quality and consistency of the first-party output following the recent consolidation of studios. As Xbox continues its “reset,” the main takeaway for the community is a pivot toward focusing heavily on established franchises, which the company claims is now the core driver for their renewed growth.