Xbox continues to see declines in Microsoft’s financial reports, and new boss Asha Sharma says that “we know we have work to do.” The brand has struggled quite a bit over the last few years, as Xbox has failed to compete against industry leaders like PlayStation, Nintendo, and Steam. Console sales in particular have struggled, and the company seems to be lacking a real identity at the moment.
Asha Sharma took over as Xbox boss in February, replacing Phil Spencer. In a short amount of time, Sharma’s tenure has seen a number of changes at the company. The changes seem designed to correct some of the problems at Xbox, from small quality-of-life improvements to the brand’s overall perception.
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Financial Struggles at Xbox
In a post on Twitter, Asha Sharma reacted to the division’s declines seen in Microsoft’s Q3 financial reports. The Xbox boss posted that “we know we have work to do.” Microsoft’s financial reports show a 5% decrease in content and services revenue compared with that same time frame in the previous year, as well as a 33% decline in hardware revenue. The latter isn’t too surprising; Xbox consoles saw multiple price increases last year. Gamers are used to console prices dropping late in their lifespan, rather than getting more expensive. With the company openly discussing its new Project Helix console, it’s unlikely that gamers are going to buy an Xbox Series X that now costs more than it did at launch.
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The decrease in content and services revenue could similarly be attributed to Xbox Game Pass price increases. While Xbox has not offered information about the number of subscribers to the service, many gamers balked when the cost of the service increased last year, and it could have led to dropped subscriptions. An Xbox Game Pass Ultimate price decrease was one of Sharma’s first actions, with the caveat that Call of Duty games will no longer arrive on day one. It’s unclear if that change will result in revenue increasing, but the move could lure back lapsed subscribers.
Sharma is clearly looking at different ways to improve the overall Xbox experience. One of the more controversial moves by the company in recent years was the decision to start offering first-party games on platforms like PS5 and Nintendo Switch. While the move has generated increased sales for games like Forza Horizon 5, it’s also making people question whether it’s worth owning an Xbox console. Sharma says Xbox will “reevaluate” how exclusives are handled, but it remains to be seen whether gamers can expect to see an actual change.
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Fans have spent the last few years questioning what the future holds for Xbox. Sharma took over for Phil Spencer while Xbox’s Q3 was already underway, and it will likely take time for any proposed changes to have an impact. A stronger Xbox is good for the overall video game industry because it could spur competition and lead to better products and games across the board. Sharma is correct that it could require a lot of work to turn around Xbox’s current perception, but hopefully, things will start to improve for the company in the near future.
