We spend too much time inward instead of with the community
When Asha Sharma took the helm of Xbox in February, she inherited not just a division but a diagnosis — one of institutional drift from the very players the platform was built to serve. Three months later, with hardware revenue down a third and patience running thin, she has begun the difficult work of renewal: replacing two dozen-year veterans with engineers schooled in artificial intelligence, betting that the discipline of building systems that scale can restore what years of inward momentum eroded. It is a wager that gaming's future and AI's future are not parallel roads but the same one.
- Xbox's hardware revenue has collapsed by 33% in a single quarter, creating a crisis that Sharma has described in terms of disconnection — from players, from speed, from purpose.
- Two 24-year Microsoft veterans are departing, signaling that loyalty to the past is no longer sufficient currency in a division that needs to reinvent itself urgently.
- Sharma is importing five executives from AI and tech backgrounds — including a former OpenAI growth lead and a startup founder — to inject product discipline and engineering velocity into a culture she found too slow.
- Existing leaders are being redeployed rather than discarded: one now leads next-gen console development, another takes on personalization and AI, suggesting a restructuring more surgical than wholesale.
- Early signals of the new direction are already visible — Game Pass price cuts, a reversal on Call of Duty launch inclusion, and the quiet shutdown of the Copilot gaming feature — moves that read less like strategy and more like triage.
Asha Sharma arrived at Xbox in February with a clear-eyed verdict: the division had turned away from its players. Three months later, she acted on it. An internal memo circulated through Microsoft announcing a sweeping leadership overhaul — four executives imported from her former team at CoreAI, two long-tenured veterans shown the door, and a set of new mandates designed to make Xbox move faster and think differently. Hardware revenue had fallen 33 percent in the most recent quarter. The old structure, she concluded, wasn't going to reverse it.
The centerpiece of the reshuffle is Jared Palmer, now VP of Xbox engineering, who worked directly under Sharma at CoreAI and before that led AI efforts at Vercel following its acquisition of his startup. Joining him are Tim Allen, who will unify Xbox's design, engineering, research, and creative functions under a single leader for the first time; Jonathan McKay, who spent a year running growth for ChatGPT at OpenAI; Evan Chaki, tasked with building a team to eliminate repetitive development work; and David Schloss from Instacart, where Sharma herself once served as COO, who will oversee subscriptions and cloud.
The departures are equally telling. Kevin Gammill and Roanne Sones — each with 24 years at Microsoft — are stepping away, making room for Sharma's vision to take hold. In their place, Jason Ronald has been elevated to lead Project Helix, Microsoft's next-generation console effort, while Fatima Kardar takes on a new personalization organization alongside her existing AI responsibilities.
The urgency is real. Beyond the leadership changes, Sharma has already cut Game Pass prices, reversed a decision to include new Call of Duty titles at launch, and wound down the Copilot gaming feature announced just months earlier. These are not the gestures of a division with time to spare. What Sharma is ultimately wagering is that people who have built large-scale AI systems — who understand speed, user intent, and product discipline — can translate that fluency into something gamers actually feel. The next few quarters will be the answer.
Asha Sharma arrived at Xbox in February with a diagnosis: the division had turned inward, away from the people who actually played its games. Three months into the job, she acted on it. In an internal memo that circulated through Microsoft's ranks, Sharma laid out a sweeping leadership overhaul—one that would bring in four executives from her former team at CoreAI, the company's artificial intelligence engineering group, and push out two veterans who had spent nearly a quarter-century at Microsoft. The message was blunt: Xbox needed to move faster, think differently, and reconnect with its community. The division was bleeding hardware revenue, down 33 percent in the most recent quarter, and the old guard wasn't going to fix it.
The centerpiece of Sharma's reshuffle is Jared Palmer, who becomes VP of Xbox engineering. Palmer spent the last several years at CoreAI as VP of product, where he worked directly under Sharma. Before that, he was VP of AI at Vercel, a company that had acquired his startup, Turborepo, back in 2021. Sharma has made clear that Palmer will be her right hand on the division's thorniest technical challenges. Joining him are Tim Allen, who will consolidate Xbox's design function—product, engineering, research, and creative work under a single leader for the first time—and Jonathan McKay, who spent a year running growth for ChatGPT at OpenAI before moving to CoreAI. Evan Chaki, a general manager at CoreAI, is being brought in to lead a new team of forward-deployed engineers tasked with eliminating repetitive development work. The fifth addition is David Schloss, a senior director from Instacart, where Sharma herself had served as chief operating officer. Schloss will oversee Xbox's subscriptions and cloud business.
The departures signal a clean break with the past. Kevin Gammill, corporate VP of Xbox user experience, is leaving outright after 24 years at the company. Roanne Sones, corporate VP of Xbox devices and ecosystem, is taking a leave of absence after the summer before returning in an advisory capacity—also after 24 years. Their exits make room for Sharma's vision. Jason Ronald, who previously led Xbox gaming devices, is being promoted to oversee Project Helix, Microsoft's next-generation console. Jason Beaumont has stepped into an interim head of engineering role. Fatima Kardar, meanwhile, is taking on a new personalization organization focused on search and discovery while keeping her existing AI responsibilities.
The timing reflects genuine urgency. Xbox's hardware revenue collapse—a third of what it was a year ago—has forced Sharma's hand. She has already cut Game Pass prices and reversed a decision to include new Call of Duty titles in the subscription at launch. The Copilot gaming feature, which Microsoft had announced for consoles just two months earlier, is being wound down. These are not the moves of a division coasting. They are the moves of a division in crisis, trying to find its footing.
What Sharma is betting on is that AI expertise and product discipline can solve what institutional inertia could not. By pulling in people who have worked on large-scale AI systems—people who understand how to build products that scale, how to move quickly, how to think about what users actually want—she is essentially saying that gaming's future is not separate from AI's future. Whether that bet pays off will depend on whether these executives can translate their experience in artificial intelligence into something that resonates with gamers who care about frame rates, story, and community. The next few quarters will tell.
Citas Notables
We spend too much time inward instead of with the community. We lack the depth we need in some of the fundamentals.— Asha Sharma, Xbox CEO, in internal memo
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Why bring in AI people to run a gaming division? Aren't those very different problems?
On the surface, yes. But Sharma's point seems to be that Xbox's problem isn't really about games—it's about how the company builds products and talks to its audience. CoreAI people know how to move fast, iterate, and stay close to what users actually want. That's not an AI skill; it's a product skill.
But she's also cutting Game Pass prices and pulling back on features like Copilot. That sounds like retreat, not innovation.
It's triage. You can't innovate your way out of a 33 percent revenue drop in one quarter. You have to stabilize first. The price cuts and feature reversals buy time while the new leadership figures out what Xbox should actually be.
Two 24-year veterans are out. That's a lot of institutional knowledge walking out the door.
True. But Sharma seems to have decided that institutional knowledge was part of the problem—that the division had become too comfortable, too focused on internal processes rather than external reality. Sometimes you have to break that to rebuild.
Is this about AI in games, or is it about AI in how you run a gaming company?
I think it's the latter. The AI expertise matters less than the mindset these people bring. They've worked on products at massive scale, with millions of users, in real time. That's the muscle Xbox needs to rebuild.