The exec said that the "streamlining" enacted by Asha Sharma is "great to see" as thousands lose their jobs

The CEO of Microsoft, Satya Nadella, has said that the company's Xbox division needs to "invent" the correct "sustainable business model" to allow it to reach more and more people with its games.

Speaking on the Sources Podcast, the executive commented on the substantial cuts that new Xbox chief Asha Sharma her enacted, describing the "streamlining" – which has resulted in thousands losing their jobs and studios facing closure – as "great to see". Nadella added that he believes Xbox will "return to growth" in the coming fiscal year (2027/28).

"If I look at the studios, the IP portfolio we have, and our ability to then take that and produce great games going forward, I feel fantastic," Nadella said.

"There’s some amount of streamlining the team is doing, and Asha is doing, which is great to see. And then we have to invent the right sustainable business model that allows us to deliver gaming to more and more people.

"That has always been the goal, which is that we want to be a great publisher and a great platform provider for games across both PCs and Xboxes. And so that is sort of our goal.

"And I think Asha and team have said that Xbox is going to get back to growth this next fiscal year, and that’s the plan they’re executing on. And in that process, do a bang-up job of producing some great games."

In July, Xbox announced plans to lay off 3,200 staff – around half of which was enacted straight away – and divest five studios. Last week, another 268 roles were cut, while Microsoft reshuffled its games division, moving Halo, Rare and Age of Empires under Activision's umbrella.

"Unfortunately, two separate agreements for Ninja Theory fell through," Xbox's chief content officer Matt Booty wrote on the company's Wire outlet.

"We will now begin consultation with employees on a proposed closure while continuing to explore other paths forward. Consultation with Arkane remains underway and is expected to continue through the end of the year."

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