XBOX SIGNALS 'RESET' WITH LOOMING LAYOFFS AND STUDIO CLOSURES

Sharma and newly-promoted chief content officer Matt Booty outlined the "Xbox reset" in a June 10th staff memo. The division struggles with elevated console memory and storage expenses stemming from ongoing supply chain issues. The overextended studio portfolio—built through acquisitions of companies like Bethesda and Activision Blizzard—now requires restructuring. Reports indicate layoffs and potential studio closures are imminent, though specific numbers remain unclear. The move marks Microsoft's second major Xbox restructuring in recent years. The company must balance maintaining its gaming ecosystem with tighter financial discipline. Industry observers note the console market's shifting dynamics, with Game Pass subscriptions becoming central to Xbox strategy. Staff announcements regarding specific closures and headcount reductions are expected in coming weeks.