Xbox’s Halo and Fallout strategy shows signs of following Marvel

Xbox CEO Asha Sharma’s big company reset came with a promise to re-invest resources into ventures that would boost Xbox revenue — alongside thousands of layoffs. Previous investments in award-winning games didn’t pay off, despite Xbox wanting culturally relevant, award-winning games. So now it’s time for more of the things Xbox players love. It’s a terrible decision that seems designed to inevitably result in Marvel-style blandness and oversaturation.

The rationale Sharma gave in her July 6 company memo, for these changes is that the Xbox division’s profit margins are lower than its competitors. She doesn’t say the money isn’t there — just that other companies are making more. That is not a normal, healthy way to look at running a business.

Xbox will invest the same amount of money or more into developing new games as it did in previous years, but not in games from smaller studios. Those ventures weren’t profitable, which is what happens when you buy studios and mismanage them for years, publishing one or two games from each of them across five years or, in cases like Compulsion and Undead Labs, nearly a decade.

That investment is going toward games Sharma and her team believe will generate more sales, and given the studios Xbox has left, that means we can expect to see a lot more games from a handful of franchises: Halo, Fallout, The Elder Scrolls, Gears, and Forza. Maybe that sounds like a positive thing, but I doubt it will be.

Halo games sell well and meet with widespread critical acclaim, but they also historically have several years between launches, enough time to forget how functionally similar they all are. Pumping out more Halo games, faster, means less time to differentiate each entry. Bethesda essentially makes one kind of Elder Scrolls game and one kind of Fallout game and then keeps making the same thing, but bigger, with each subsequent release. Just look at Starfield. Take away the space trappings, and you’re just left with an Elder Scrolls-Fallout hybrid. Gears had its heyday in the Xbox 360 era, and the new prequel looks like… just more Gears. Meanwhile, Forza games are starting to blur together even with years between each launch. Doom has potential and a history of high-performing, varied releases. Or it would have potential, if Microsoft hadn’t ripped iD Software apart.

The future for these franchises was dim even before Sharma’s Xbox reset. Forcing devs to crank out more games and, presumably, faster almost guarantees they’ll go the way of the Marvel film universe — creatively lacking, with shortened gaps between releases only highlighting how similar each new project is from its predecessor. A smart plan would arrange production teams and release schedules so there’s plenty of time for different studios to work on different visions for each franchise, giving them new life and setting the stage for a brighter future. But Xbox leadership has repeatedly proven resistance to planning beyond the present, and its current recklessness and lack of foresight don’t suggest a break from that habit.

Admittedly, this oversaturation scenario may never come to pass. Xbox leadership’s baffling decision not to launch a new Fallout game — or even a remaster — alongside the show’s first season may be understandable, as video game adaptations have notoriously been hit or miss for decades. (And outside of gaming circles, Fallout was hardly a well-known franchise.) But the show won awards, and anticipation grew for the second season, which Xbox celebrated by… also not launching or even announcing a new or remastered Fallout game.

Image: Bethesda Game Studios

If the reported Obsidian Fallout game only just entered development, the chances of it being ready in time for Fallout season 3, which already started filming in May 2026, are infinitesimal. Maybe Obsidian gets it out in time, but modern game dev cycles typically last around five years or more; Fallout season 2 began filming at the end of 2024 and debuted in December 2025, so it’s reasonable to assume season 3 will air sometime in summer 2027 or maybe later that year. Fallout season 2 was Amazon’s second-best returning series, so maybe season 3 will attract millions of viewers, too. And maybe a large segment of the 80+ million people watching Fallout are also people who would want to play Fallout games. That’s a lot of big maybes to hinge a strategy on, though.

Let’s not forget that, in addition to exiling studios into a wasteland barren of funding, Microsoft also gutted most of its remaining studios, including parts of Fallout and Elder Scrolls-maker Bethesda. Games launching after interest declines might be the optimistic outcome. Games not launching at all or suffering through more problematic development cycles with greater crunch and more unrealistic expectations than usual — that seems like the more realistic one.