New Xbox CEO kills Microsoft Gaming, are exclusives next?

Xbox’s new leadership is rapidly making changes to Microsoft’s gaming division. That starts with the end of “Microsoft Gaming” and a reevaluation of the Xbox team’s “approach to exclusivity, windowing, and AI,” Chief Content Officer Matt Booty and CEO Asha Sharma said in a memo to employees on Thursday.

That letter to employees was later published publicly on Xbox Wire, and it offers some insight into the new way of thinking at Xbox following the departure of former leaders Phil Spencer and Sarah Bond.

“‘Microsoft Gaming’ describes our structure but it does not describe our ambition. So, we are going back to where we started and changing our team’s name,” Booty and Sharma said in the memo. “We are Xbox.”

The Xbox executives’ message to employees starts by addressing the challenges that the third-place console maker faces, leading with “Players are frustrated.”

“New feature drops on console have been less frequent. Our presence on PC isn’t strong enough. Pricing is getting harder for people to keep up with,” Booty and Sharma said. “And core experiences like search, discovery, social, and personalization still feel too fragmented. Developers and publishers are asking for more, too: better tools, better insights, and a platform that helps them grow faster.

“At the same time, a new generation of players is coming online with different expectations. Their time is split across games, media, and everything else competing for attention. They expect more content in familiar places, want to shape the worlds they play in, and want to create and socialize together, not just play together.”

Image: Xbox/Microsoft

The duo also address increased competition from platforms like Roblox and from developers around the globe, seemingly a reference to the reach of studios in China and South Korea. Old models of thinking just won’t cut it anymore, they warned: “The model that got us here won’t be the one that takes us forward.”

While Booty and Sharma don’t offer much in the way of new insight into the next-generation Xbox, codenamed Project Helix, they asserted that the next era for Xbox “will be built to be affordable, personal, and open.” With gaming consoles, computer components, and literally everything else getting more expensive, affordability is sure to be a key factor in the next Xbox.

“We will offer flexible pricing so it’s easy to get started and keep playing,” they add. “The experience will adapt to you, letting you customize how you play, helping you find what you’ll love, and connecting you with the right people. And we will be open to all creators, from individuals to the largest studios, giving anyone the tools to reach a global audience and keep their games growing over time.”

Image: Microsoft

They lay out ambitious goals for Xbox hardware, games, and services, and noted, “Along the way, we will reevaluate our approach to exclusivity, windowing, and AI, and share more as we learn and decide.”

It’s that new approach to exclusivity that will likely stoke curiosity in Xbox fans. Under Spencer, thanks to acquisitions of multi-platform developers like Mojang, Activision, Bethesda Softworks, and others, Microsoft broke free of traditional console-exclusivity constraints. Many first-party Xbox Game Studios games now arrive day-and-date on Nintendo and PlayStation platforms. Whether that will meaningfully change in the future remains to be seen, but if Xbox wants to have real platform differentiators, we could see brands like Halo, Forza, and Gears of War return as Xbox exclusives, if only for limited-time windows going forward.

The Xbox team is clearly ramping up quickly to effect change under Sharma and Booty, and with Project Helix on the horizon, it will be fascinating to see what drastic measures Microsoft will take to revive the Xbox brand.