Xbox once vowed to “Power Your Dreams.” These days, it just wants to keep the power — meaning the lights at its Redmond, Washington HQ — on.
On Monday, new-ish Xbox CEO Asha Sharma announced “the most significant restructure in Xbox history,” including the loss of 3,200 jobs (1,600 today) and four studios: Compulsion Games (We Happy Few, South of Midnight), Double Fine Productions (Keeper, PsychoNauts), Ninja Theory (DmC: Devil May Cry, Hellblade: Senua’s Sacrifice) and Undead Labs (State of Decay).
Owned by the mighty Microsoft, the Xbox division has been pumped full of investment until it nearly burst. Sharma’s unenviable job is to trim the fat before this whole thing blows up. She’ll spend the next year doing exactly that.
“Our business today is not healthy. We are operating at margins that are 3-10x lower than comparable platform and publishing businesses,” Sharma wrote, in part, in a memo to employees. “We must reset XBOX.”
Xbox has had more than a few swings and misses since the Xbox 360 gave way to the Xbox One. NYU Stern School of Business video games professor Joost van Dreunen counts 15 acquisitions over the past 13 years. The most prominent — and the most expensive at $69 billion — was Call of Duty-maker Activision Blizzard, which bloated the balance sheet like Augustus Gloop.
