Microsoft CEO Satya Nadella said Xbox has to “invent the right sustainable business model that allows us to deliver gaming to more and more people.” His comments came days after the gaming division cut another 268 jobs.
Nadella spoke near the end of the September 25 episode of the Sources podcast with Alex Heath. Most of the interview focused on Copilot and Microsoft’s AI plans, and he didn’t say what Xbox’s new business model would look like.
He said Xbox CEO Asha Sharma and her team expect the business to return to growth next fiscal year. Because Microsoft’s fiscal year runs from July to June, that means the year beginning in July 2027.
Nadella said he feels “fantastic” about Xbox’s studios and intellectual property. He described the cuts as “some amount of streamlining the team is doing, and Asha is doing, which is great to see.”
He also said Microsoft still plans to be both a game publisher and a platform provider across Xbox consoles and PC.
The comments follow a September 22 memo from Xbox Chief Content Officer Matt Booty announcing 268 job cuts across Halo Studios, other first-party studios, and Xbox Game Studios’ management and central functions.
The memo also moved development of the next Halo game to Activision, which will oversee Rare and World’s Edge, the studio behind Age of Empires.
Nadella made a similar point in June on the Hard Fork podcast. “No one can accuse Microsoft of not having invested for the last 25 years,” he said. “And now we have to turn this into a sustainable business.”
Sharma said in June that she would spend her next 100 days taking a fresh look at the business.
In the Philippines, Microsoft sells PC Game Pass, which dropped earlier this year from PHP 320 a month to PHP 225. Nadella didn’t announce any changes to Game Pass pricing or availability.