PrinceJago

Microsoft's own Xbox CEO admitted the division lost 64 cents on every dollar it invested in studios. In a typical year. She put that in a public memo. Read her résumé and the last seven months stop looking like chaos. Asha Sharma was COO of Instacart, where she took a cash-burning delivery company through an IPO by cutting it to profitability. Before Xbox, she ran Microsoft's AI platform products. Satya put her in the seat in February, right after Phil Spencer retired following 12 years running the division. Operators with that résumé get hired to do exactly what they did last time. Xbox runs at a 3% profit margin inside a company that runs around 45%. The playbook is executing on schedule. Revenue fell $1.7 billion in FY26, so she announced 3,200 job cuts and released four studios, including Double Fine and Ninja Theory, from a portfolio Microsoft spent over $76 billion assembling. Cloud gaming got time limits. Marketing budgets got slashed. And one number explains where this ends. 200 million new players came to Xbox and its games in FY26. Revenue fell anyway. When the audience grows that fast while revenue shrinks, Xbox stops being a console company and becomes a publishing layer reaching a billion players on hardware Microsoft doesn't build. The gun in the meme belongs to Microsoft. The console business is what's in front of it.