Nadella backs Xbox restructuring and expresses confidence in remaining studios
Microsoft CEO Satya Nadella said he is optimistic about Xbox’s remaining studios and intellectual property, and he welcomed the ongoing streamlining of the business. He repeated new Xbox CEO Asha Sharma’s aim to restore growth by prioritizing major games and testing new business models. The remarks come amid major layoffs and reorganizations, including Halo moving to Activision and several studios changing ownership or facing closure.
Nadella discussed Xbox on the Sources Podcast, saying he remains positive about the company’s remaining development teams and franchises. He echoed new Xbox chief Asha Sharma’s plan to pursue growth by concentrating on flagship titles and experimenting with fresh revenue approaches.
Microsoft’s restructuring has included roughly 3,200 planned job cuts across Xbox, with the latest phase reportedly about three-quarters finished. Halo’s intellectual property shifted to Activision, Obsidian moved under Bethesda, Ninja Theory faced closure, and Double Fine, Compulsion, and Undead Labs are no longer under Microsoft. Arkane was still for sale.
The restructuring could affect Xbox employees and partner studios through further uncertainty, while players may see fewer experimental titles if resources shift to major franchises. Independent teams leaving Microsoft may gain flexibility but also face financial risk. The industry’s broader contraction may shape hiring, creative diversity, and how games reach audiences, though outcomes remain uncertain.