Xbox CEO Asha Sharma has issued an extremely long statement over on Xbox Wire to explain the decision, outlining three aims in particular about how she plans to "reset Xbox" and return the business to growth in the future.
These three aims are the following:
- "First, we will reset our content portfolio."
- "Second, we will reset our platform."
- "Third, we are resetting how we operate."
The first of these aims obviously refers to making reductions in terms of studio numbers, but also shifting priorities to certain other projects along the way. Here are some quotes about why decisions are being made:
"It is neither possible nor desirable to own every great independent studio. We have also learned that we are not the best home for every type of studio; in a typical year, we lost 64 cents for every dollar we invested. As we reset XBOX, we will help independent creators succeed by providing open development tools and audiences to realize their vision."
"We are also making reductions across other units, and in some cases, shifting investment to focus on higher priority projects. These changes vary in size across Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and XBOX Game Studios."
"In addition, Mojang and King will now report directly to me. These two studios have increasingly become platforms and are our largest by monthly active players."
The second aim is about finding ways to reduce the complexity of how decisions are made, how features are rolled out, and ultimately how many management layers have to be involved in all of Xbox's processes.
Sharma simply says "we will simplify" how the platform side of things is run:
"Today, in some parts of the company, work passes through as many as 14 layers of management. Our platform teams are 40% larger than they were at the start of this generation, even as our player base and playtime have declined. That complexity has slowed decisions, blurred accountability, and made it harder to deliver for players. As we reset XBOX, we will simplify."
"We will deliver success through a flatter organization that is built around makers (individual contributors focused on building), player-coaches (leaders who remain deeply involved in the work while developing their teams), and directly responsible individuals (DRIs) who own key decisions and outcomes. And we will streamline how we work across our tools, with a cleaner code base, shared services, and 50% reduced vendor spend."
And finally, the third aim relates to a concern that Xbox has become "fragmented" over the years as the business has grown. Sharma says it's too hard to "work towards a shared goal, make the right tradeoffs, and get things done".
The following changes are being made as a result:
"As XBOX grew our headcount, we became more fragmented. Teams, studios, and functions often operate independently, and it became harder to work towards a shared goal, make the right tradeoffs, and get things done."
"For the first time, we are establishing a Chief Operating Officer with end-to-end P&L responsibility across content, hardware, platform, and services. Helen Chiang has been promoted to this role and will report directly to me. Helen has helped build some of our most important businesses, from XBOX Live to leading Mojang and the Minecraft franchise. She will bring our businesses together under one operating model, making sure we make clear investment decisions, learn from our successes and failures, and hold ourselves accountable for results."
There's a whole lot more about all of this in the Xbox Wire article if you're interested, including how the Xbox CEO wants the brand to reach "more than a billion people each day".
It's certainly an intriguing plan - we're just saddened that so many people have had to lose their jobs in the process.
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