Microsoft CEO Satya Nadella has now weighed in on the cuts reshaping Xbox, and he sounds pleased with them.
“There’s some amount of streamlining the team is doing and Asha is doing, which is great to see.”
Nadella said it on the latest episode of the Sources podcast with Alex Heath, published Friday. Heath, who sat down with Nadella in Seattle around the unveiling of Microsoft’s new Copilot, spent most of the conversation on AI agents before turning, near the end, to the state of Xbox and the transformation it’s going through. “Asha” is Asha Sharma, who now leads Xbox.
RCG reported earlier this week that Xbox confirmed 268 more job cuts and moved future Halo development to Activision as part of a restructuring of roughly 3,200 roles.
What Nadella said
Nadella opened by pointing out that gaming has been part of Microsoft since before Windows existed (Flight Simulator came up) and said it sits in the same “core DNA” as the company’s developer tools and knowledge-work software. Then he turned to the content side:
“I feel fantastic about the IP we have right now, which is 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.”
Right after the streamlining line, he framed the business problem Xbox still has to solve: “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 we want to be a great publisher and a great platform provider for games across both PCs and Xboxes.”
And he pointed to a target: “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.” Their job along the way, he added, is to “do a bang-up job producing some great games.”
Reading between the lines
The exchange lasts only a couple of minutes, but it’s an unambiguous on-record signal that the Xbox overhaul has backing from the very top of Microsoft. Nadella’s framing is about IP, platforms and a return to growth. The people who lost their jobs didn’t come up in the Xbox portion of the conversation, and Kotaku’s Zack Zwiezen zeroed in on exactly that, writing that Nadella “offers up no empathetic statement or even a fake apology.”
The “sustainable business model” line may be the one to watch. When he describes Microsoft as a “publisher and platform provider for games across both PCs and Xboxes,” PC gets named in the same breath as the console. Nadella didn’t put a number on “growth,” and he didn’t say what the business model he wants to invent actually looks like.
For Xbox staff and players still waiting to see where the reset lands, the takeaway is simple: Microsoft’s CEO isn’t looking to slow it down.
