Xbox has undergone main adjustments since a brand new management workforce took over. Underneath Xbox CEO Asha Sharma, Microsoft’s gaming division has had waves of mass layoffs, parted methods with a number of studios, and consolidated its remaining builders underneath Activision, Blizzard, King, and Bethesda. All of that is being accomplished to make Xbox a worthwhile a part of the Microsoft empire and to develop its attain, however former PlayStation boss Shawn Layden has recommended that the corporate ought to “decide a lane” and slender its focus.
“I mentioned in one other interview a few months in the past, you have to decide a lane,” Layden mentioned to The Enlargement Go when he was requested if he had any recommendation for Sharma. “Both you are going to be a platform aggressive with PlayStation–which Xbox has not been aggressive with PlayStation for years–but that is not out of the window. You’ll be able to nonetheless make one other run at it. And there are specific selections it’s a must to make round that concerning the platform. We talked about exclusivity. We talked about how do you incentivize third events to assist your platform in a significant approach. These are all issues across the platform enterprise, otherwise you sit again and notice you’re the largest sport writer within the world–maybe Tencent’s bigger–but within the Western world you’re the largest sport writer on the market with Activision, Blizzard, Bethesda, and all the opposite items.”
“Be that. That is your Dreamcast second. When Sega determined, ‘We’re simply going to be on PlayStation 2 and we’ll get out of the {hardware} enterprise and simply be an amazing software program firm. It may be accomplished. It has been accomplished earlier than. That is my recommendation. Decide a lane.”
The “Dreamcast second” that Layden refers to is the rise and fall of Sega’s final house console–the second when Sega realised it might not compete in the gaming {hardware} market and needed to shift fully to software program. Microsoft has been notoriously secretive with the gross sales of its Xbox {hardware}, because it’s believed that it trails far behind Sony’s PlayStation 5 (95.3 million models bought as of June 2026).
The long run does not look too good for Xbox console gross sales both, as analysts predict that solely 2.5 million Xbox Sequence X|S models shall be bought in 2026, as Microsoft prepares for a “fast wind-down towards zero” forward of its next-gen console launch.
Wouldn’t it make sense for Xbox to shift in direction of being a software-only firm then? There is definitely proof to recommend that it could be a viable path ahead, as a number of of its first-party video games have accomplished excellent numbers on PC and PS5, and if it is streamlining operations to concentrate on hit franchises like Fallout and Forza Horizon, there may be an viewers for these video games.
In fact, releasing video games on PlayStation and Steam additionally signifies that Xbox has to surrender a minimize of its income, whereas it will get to maintain 100% of first-party sport gross sales once they’re bought by way of Xbox console and PC storefronts. Microsoft additionally fees a payment to third-party builders, so there’s numerous nuance behind the mathematics of sticking with gaming {hardware} or focusing purely on software program.