Xbox’s new leadership appears to have a simple, uncomfortable priority: get the next Halo and Fallout games moving faster, even if that means shrinking the list of projects allowed to exist. According to a new report from The Information, Xbox CEO Asha Sharma is looking to shift money and staff toward Microsoft’s biggest gaming franchises while cutting back on studios and projects that are not performing as well. It’s a classic corporate diet plan, except the calories are people, studios, and creative bets.

Why Xbox wants fewer bets and bigger hits

The report, which cites three anonymous sources, says Sharma is trying to repair a gaming business that needs reliable releases more quickly. Her plan reportedly focuses on moving resources toward proven franchises such as Halo, Fallout, and The Elder Scrolls.

That would mark a notable shift from the Phil Spencer era, when Xbox spent years buying studios and building a wide catalog meant to feed Xbox Game Pass, its subscription service. The strategy was simple: more genres, more teams, more reasons for players to stay subscribed.

Now Microsoft seems to be focusing more on what consistently sells. New games in the Halo, Forza Horizon, and Fallout series remain dependable commercial draws. Last year’s remake of The Elder Scrolls IV reportedly performed better than many newer releases that launched around it, which is both a compliment to nostalgia and a slightly awkward memo to everyone funding new ideas.

What the reported budget shift means

The Information says Xbox’s overall game development budget is expected to stay flat for the 2027 fiscal year. The change would not come from simply spending more across the board. Instead, Microsoft would pull resources from weaker areas and redirect them to its largest franchises.

The timeline explains the pressure. Halo Infinite launched five years ago, and this year’s Halo: Campaign Evolved is only a remake of the first game’s single-player campaign. The Elder Scrolls VI still appears to be years away, while Fallout 5 is not expected until well after that.

Sharma also reportedly wants to put more investment behind Minecraft, another Microsoft giant that is said to be trailing Roblox. For a company that owns some of the most recognizable properties in games, brand awareness is not the problem. It is getting major new content out at a pace that keeps audiences engaged.

How far Microsoft might go with Xbox

The report says Microsoft CEO Satya Nadella and Chief Financial Officer Amy Hood have approved Sharma’s resource shift for the next fiscal year, which begins in July. But the larger future of Xbox may still be unsettled.

According to the report, Microsoft hasn’t ruled out a more dramatic restructuring. Possible options could include:

  • Turning Xbox into a wholly owned subsidiary, similar to LinkedIn and GitHub
  • Creating a joint venture with another company
  • Selling the business entirely

Those are very different outcomes, and none of them would be small. How quickly Sharma’s plan produces results could help determine which direction Microsoft chooses. If the biggest franchises start arriving faster and performing strongly, Xbox may have a stronger case to remain structured as it is. If not, the company may decide the current arrangement needs a much larger rewrite.

Layoffs could hit the studios Xbox recently bought

In the near term, the report points to severe layoffs across Xbox. That could include studios Microsoft acquired during the past decade, when Spencer led an aggressive expansion of the company’s gaming footprint.

The human cost is the clearest part of the story, even if corporate reports like to wrap it in tidy words like “redeployment.” Developers who were brought into Xbox as part of a long-term growth plan may now find themselves exposed by a shorter-term push for bigger, faster returns.

That tension is not new in games, but it is especially sharp here. Xbox built a pitch around creative range and subscription value. Now, the company may be moving back toward the safest names on the shelf. For players, that could mean more attention on beloved series. For teams working outside those franchises, it may mean the ground under them is less steady than it looked.

Why faster development is not a simple fix

Sharma’s reported goal sounds obvious enough: release major games faster. The problem is that modern blockbuster development keeps getting more expensive and more complicated. Large teams, long production cycles, technical demands, and rising audience expectations do not disappear because a spreadsheet asks them nicely.

Microsoft has also struggled this console generation to establish a dependable rhythm of high-profile releases that arrive on time and with enough polish to dominate award-season conversations. Concentrating resources on major franchises may help, but it does not instantly solve production bottlenecks or creative delays.

Nadella addressed the issue during an appearance on Hard Fork earlier this week, saying Sharma was “going to take a fresh look and make sure we deliver on what our fans expect of us.” He added: “We have to turn this into a sustainable business.”

That is the blunt version of the mandate. Xbox needs games people are waiting for, it needs them sooner, and it needs the business behind them to make sense. The difficult part is getting there without hollowing out the very studios expected to deliver the comeback.