The Xbox CEO didn’t beat around the bush when discussing the financial health of the department she leads. “Our video game business is not doing very well,” admitted Asha Sharma, who was named its head in February with a mission to turn things around. “Our operating margins are 3 to 10 times lower than comparable platforms and publishers,” she continued, pointing to “higher structural costs” as well as a “smaller console fleet” than its main competitors, Sony and Nintendo. After compiling the inventory, the boss decided to make a decision to carry out a large-scale reorganization, as a result of which 1,600 people would be laid off in this division. Microsoft in particular will spin off four studios, namely Compulsion Games and Double Fine Productions, which will once again become independent, and Ninja Theory and Undead Labs, which will be transferred to funds. The last studio in question is the French Arkane, the fate of which has not yet been decided by Microsoft. “We will return to growth in 2027,” the manager concluded, sounding hopeful.
In another area, the field of artificial intelligence, the technology conglomerate announced its intention to replace OpenAI (ChatGPT) and Anthropic (Claude) models with its own (Microsoft AI or MAI) in a number of its solutions, starting with Outlook and Excel. The stated goal is to minimize costs at a time when token prices are skyrocketing.