Asha Sharma reportedly told Xbox staff that first-party games have returned to growth after an all-time low, but layoffs, restructuring, and missing numbers make the recovery claim hard to judge yet.
Image: games.gg
Xbox’s recovery pitch starts with a striking admission
Xbox CEO Asha Sharma reportedly told employees this week that Microsoft’s gaming business has “started to return to growth” in first-party games after hitting “an all time low,” according to Windows Central reporting cited by VGC, Eurogamer, GameSpot, Kotaku, and other outlets. That is the concrete development at the center of the story: Xbox leadership is now telling staff that the first-party side is growing again after a period Sharma described as severe enough to require a reset.
The tension is in the missing scoreboard. Per the Windows Central report, Sharma said Xbox is “more than two to three times what we were,” but the reporting does not establish what metric that refers to, what the baseline was, or how large the recovery is in absolute terms. VGC specifically notes that actual numbers do not appear to have been confirmed. GameSpot framed the same point bluntly, saying Sharma did not provide specifics for the growth claim or for the “strong” starts she attributed to recent games.
That makes this a carefully bounded Xbox first party growth story. What is reported is that Sharma told staff first-party performance has rebounded from a low point, hours spent have stabilized after declines, and some recent releases started well. What remains unannounced is the scale of that rebound, whether it is revenue, engagement, unit sales, Game Pass contribution, or a blended internal measure, and whether the improvement is durable beyond one better quarter.
The all-time low was not presented as a normal dip
According to VGC and Eurogamer’s summaries of the Windows Central report, Sharma told staff that Xbox had been declining at the start of the year across hours spent, player numbers, and revenue. VGC reports that hours spent have now stabilized. Eurogamer likewise says the earlier decline in hours played has apparently stabilized, while player and revenue declines were part of the opening-year picture Sharma described.
Those details matter because they place the “Xbox all-time low” comment in operating terms rather than vibes. Hours spent is a key engagement signal for any platform business. Player numbers indicate reach. Revenue is the metric that decides how much of the plan can be funded without further cuts. A decline across all three at once is the kind of board-state that forces a company to choose between waiting for the next content beat or changing the structure around the content pipeline.
Sharma’s reported message was that Xbox is now reinvesting after that low point. Per VGC and Eurogamer, she said, “We’re making the right decisions to reinvest in the business,” before saying growth had returned. As a strategy read, that wording is important. It does not sound like a simple victory lap over one successful launch. It sounds like an internal argument that the painful reset was the condition for renewed investment. The hard part for players, developers, and laid-off staff is that the public record still shows the pain much more clearly than the payoff.
The recovery claim sits on top of layoffs and studio upheaval
The reported growth message arrived after months of heavy restructuring across Xbox. VGC says Microsoft enacted sweeping layoffs across the Xbox business in July as part of the reset, initially affecting 1,600 jobs, followed by a second wave last month that led to a further 268 layoffs. Eurogamer describes the restructuring as resulting in more than 1,800 job losses. GameSpot similarly cites 1,600 layoffs in July and close to 300 more in September, while also reporting that additional job losses were expected. Wccftech’s headline uses a higher 3,200-job figure, which conflicts with the more specific tallies cited by VGC, Eurogamer, and GameSpot in the provided material.
The sources also describe a deep studio reorganization. VGC reports that the reset has included closures, releases, or restructuring of multiple studios, and says Rare, World’s Edge, and the Halo franchise were moved to Activision. The Games.gg source text says Obsidian Entertainment folded into Bethesda, Turn 10 and Playground Games merged, and Ninja Theory faced closure. GameSpot reports Microsoft closed or divested a number of studios, including Double Fine and Ninja Theory. Eurogamer says the restructuring work is not expected to be completed until next summer.
Those reports should not be flattened into a clean comeback narrative. A company can improve a financial or engagement metric after reducing costs and reorganizing teams, but that does not automatically prove the creative engine is healthier. In first-party publishing, layoffs can reduce burn rate quickly while making future output harder to sustain. The strategic question is whether Xbox has cut away duplication and sharpened its release slate, or whether it has reduced its margin for error just as it needs more consistent first-party delivery.
The named games show the new Xbox first-party strategy in miniature
Sharma reportedly pointed to Gears of War: E-Day, Minecraft Dungeons 2, and World of Warcraft: Forever as having “strong” starts, according to VGC, Eurogamer, GameSpot, Kotaku, and Wccftech. No public figures were attached to those starts in the supplied reports. VGC notes that Sharma said Gears of War: E-Day was off to a strong start but had not shared numbers. GameSpot makes the same caveat for all three named titles.
Even without numbers, the trio is revealing. Gears of War: E-Day represents a core Xbox console and PC franchise. Minecraft Dungeons 2 sits inside a broader Minecraft ecosystem with family, co-op, and service potential. World of Warcraft: Forever comes from Blizzard, which became part of Microsoft through the Activision Blizzard deal and gives Xbox first-party a massive PC and live-service pillar. If those are the examples chosen for an internal turnaround pitch, the message is that Xbox first party strategy is being anchored around recognizable franchises with existing audiences rather than speculative bets.
That aligns with Sharma’s reported language about being “focused on our fans and franchises,” as quoted by VGC and Eurogamer. It also narrows the recovery claim. This is not evidence that every Xbox studio is suddenly thriving or that riskier projects are being prioritized. It suggests the early post-reset growth case is built around proven brands, broader platform reach, and franchises that can create recurring engagement. For players who want unusual first-party experiments, that may be a less comforting signal than it is for Microsoft’s finance team.
Game Pass is still the pressure point
The first-party growth claim cannot be separated from Game Pass. VGC reports that Sharma told staff the previous Game Pass strategy had sent Xbox into “freefall” declines, while Eurogamer specifies that she reportedly said the prior strategy sent the service’s profitability “into freefall.” Eurogamer adds that Sharma was likely referring to Xbox’s decision to include Call of Duty titles in Game Pass on day one, followed by Game Pass price increases in 2025 and later price cuts in 2026 at the cost of losing day-one Call of Duty. That interpretation is Eurogamer’s framing, not a directly confirmed explanation from Microsoft in the supplied text.
Sharma reportedly suggested Game Pass may become more “flexible for more players” in the future, according to VGC, while Kotaku says she discussed making Game Pass subscriptions more flexible. No new tiers, prices, dates, or catalog rules were announced in the provided source material. For current subscribers, the practical read is simple: there is no confirmed change to act on today, but Xbox leadership is openly describing the old approach as financially unsustainable.
This is where the first-party metric matters. If “growth” is being driven by sales, engagement, or cross-platform reach outside Game Pass, the service may continue shifting away from a single headline promise and toward segmented access. If the growth is internal first-party revenue, day-one subscription economics will remain under pressure unless subscriber growth, pricing, or content costs improve. Sharma’s reported comments support the idea that Xbox is still committed to Game Pass, but they do not support assuming the old value proposition will return unchanged.
Hardware plans point toward a broader ecosystem, not a single rescue box
Sharma also reportedly addressed Xbox’s next-generation hardware plans. GameSpot says she described the “Gen-10” platform, also known as Project Helix, as a “family of devices,” adding that “there is no one device that fits all.” Eurogamer reports that she reaffirmed earlier remarks that Helix would be a family of devices and referenced demand for gaming “on the go.” Kotaku quotes the same reported town hall language, including Sharma saying Xbox will have “a great console first,” while some devices will be manufactured by Microsoft and others handled through partners.
That hardware framing connects back to first-party strategy. If Xbox is trying to grow by placing its franchises wherever its audience plays, then first-party output has to serve console, PC, subscription, cloud-adjacent use cases, and portable play without fragmenting the audience. The reported reference to partners also fits the current reality of Windows-based handhelds and devices such as the ROG Ally X, which GameSpot and Eurogamer discuss in relation to Xbox’s broader handheld ambitions.
Still, nothing in the provided reporting confirms Project Helix specifications, pricing, a release window, performance targets, backwards compatibility details, or whether any future handheld would be first-party Microsoft hardware. Readers weighing an Xbox Series X|S purchase should not treat the town hall comments as a product announcement. The only supported takeaway is that Xbox is planning Gen 10 as a device family with a console at the center, while the recovery argument depends on services and software performing across more places than the living room.
The next proof has to come from numbers, not posture
The sharpest reading of Sharma’s reported comments is that Xbox believes the reset has stopped the slide. According to the reports, hours spent have stabilized, first-party has returned to growth, recent franchise releases have started strongly, and brand sentiment is up 30 percent year over year. VGC, Kotaku, Games.gg, and Wccftech all cite that sentiment figure, but the provided material does not define the methodology behind it.
For now, the recovery claim is credible as an internal leadership message, not yet measurable as a public turnaround. A rebound of “two to three times” can sound huge while still being modest if the comparison point was an all-time low. A strong launch can be healthy while falling short of franchise peaks. Stabilized hours can mean the bleeding has stopped without proving that growth has returned across the full Xbox ecosystem.
That is the frame readers should keep. Asha Sharma’s Xbox is no longer presenting the reset as a future cure. It is reportedly telling employees the medicine has started working. But after layoffs, studio restructuring, and a Game Pass model described as having gone into freefall, the burden shifts to Microsoft to show public results: clearer first-party revenue trends, durable player growth, transparent subscription changes, and a hardware plan that does not ask fans to fill in the blanks. Until then, Xbox layoffs recovery remains a claim in progress rather than a settled outcome.