Xbox's CEO Says New IP Is Survival. The Company's Recent Cuts Tell a Different Story.
In an internal town hall, Asha Sharma called for "courage" to build fresh franchises — months after Xbox cut or spun off several studios that were doing exactly that.
Xbox CEO Asha Sharma told employees at an internal town hall that the company "will not survive" if it keeps leaning on its back catalog, according to a transcript shared by Windows Central. It's a bold thing to say out loud, especially coming from a company that just spent the better part of a year narrowing down the teams built to dream up something new.
Per the transcript, Sharma put it this way: "We're backing our strongest franchises. I want our great games to become great global billion-dollar franchises. I would also like to see us continue to create enduring new IP. We will not survive if we only revive [sic] on the past. We have to find new ways, and courage, to have invention on new IP, that reaches new sets of audiences."
That's the vision. The recent track record looks different.
Over what's been internally labeled Xbox's "Reset," the company has gone through thousands of layoffs and a string of studio shake-ups. Obsidian had multiple projects cancelled and was redirected toward making another Fallout game instead of whatever it was building before. Double Fine, the Tim Schafer studio known for decades of weird, original games, was cut loose to go independent. Compulsion Games, maker of this year's original title South of Midnight, got the same treatment. Arkane Lyon has reportedly been in the crosshairs of the cuts, and Ninja Theory is currently in consultation talks after Microsoft's attempts to find it a buyer fell apart.
None of those are franchise-polishing operations. Obsidian had new work in motion before getting pointed back at a legacy series. South of Midnight was a brand-new IP that had barely had time to find its audience. Double Fine has built its entire identity around original, inventive games. If Xbox wanted the kind of risk-taking Sharma described in that town hall, it had several studios already doing it, right up until they got redirected, spun off, or put on the chopping block.
There's one wrinkle in the story: Xbox has picked up Hideo Kojima's Physint, which does technically qualify as new IP. But it's a project built around a famous outside creator and his own studio, not something Xbox funded and grew from within its own internal roster. It's a different kind of bet than the ones the company just walked away from, and it doesn't really offset the pattern.
None of this means Xbox's underlying strategy is irrational. Doubling down on proven, billion-dollar franchises is a defensible call for a division answering to Microsoft's broader business, and the studios that got cut or spun off weren't necessarily pulling their financial weight in an industry that's had a genuinely brutal stretch of years. The math behind "back our strongest franchises" is easy enough to follow.
What's harder to square is hearing that strategy paired, in the same breath, with a plea for more creative courage and new audiences. Those two goals aren't automatically in conflict, but the recent evidence points the other way, toward consolidation rather than invention. For developers who've spent the past year watching studios get folded, sold off, or reassigned, a town hall built around the importance of bold new ideas probably didn't land the way leadership intended.
What happens next with Ninja Theory, and whether Arkane Lyon comes through its own round of cuts intact, will say a lot more about Xbox's actual priorities than anything delivered from a podium.
