Xbox chief executive Asha Sharma says Microsoft plans to refocus the gaming division on its core Xbox business after concluding that previous expansion efforts spread resources too thinly. The shift matters because it follows major cuts and reflects an attempt to stabilise a business Sharma has described as unhealthy.

The plan centres on investing in major Xbox franchises, simplifying the studio-management structure and prioritising Xbox hardware, which reportedly accounts for 80% of the division’s business. Sharma said earlier bets on Game Pass, multiplatform releases and a larger studio portfolio had created value but had not grown as expected; around 1,600 Xbox jobs are being cut immediately, with a further 1,600 reductions planned over the following year.