GoKawiilAsha Sharma, CEO of Xbox at Microsoft, speaks at the Bloomberg Tech conference in San Francisco on June 4, 2026.
Microsoft's new Xbox chief is looking to push the gaming unit's margin back in line with its rivals by next year and beat them on profitability by mid-2030.
"We will not live on past successes or be trapped by past failures," CEO Asha Sharma wrote in a Thursday message to staff members that CNBC viewed. "We will learn from both and put our energy into creating what players will love for decades."
Sharma, a former Instacart and Meta executive, replaced Phil Spencer as Xbox CEO in February. She has since appointed new leaders, lowered Game Pass subscription prices and announced layoffs and divestitures of four development studios. Sharma has put more emphasis on exclusive titles for the Xbox console, delighting gamers who have seen the subsidiary bring franchises to Sony's PlayStation.
On Wednesday, Xbox turned in a 10% quarterly revenue decline — the most sluggish performance since 2022 — even as its parent surpassed consensus in cloud infrastructure and productivity software. Microsoft stock spiked almost 16% on Thursday in its strongest session since 2008.
Sharma and Matt Booty, Xbox's chief content officer, said last month that they anticipated a 3% internal margin. Sony reported a 9.9% operating margin from game and network services in the latest fiscal year, while Nintendo's approached 16%.
The Xbox Series X and Series S consoles have lagged behind the Nintendo Switch and Sony PlayStation 5 in terms of shipments.
Sharma wrote in her Thursday memo that Xbox will make every function and studio responsible for the gaming group getting back to growth in terms of number of players and revenue in the new fiscal year that ends in June 2027.
"We will build long-term plans for our biggest franchises across film, television, consumer products, sponsorship, live experiences, and form new partnerships globally, including China," she wrote.