New Xbox chief says ‘hard choices’ ahead in major reset

A leaked internal memo from Asha Sharma, the new head of Xbox, has laid out the most candid assessment of the brand's problems in years and the most sweeping plan to fix them.

First verified by The Verge, the memo follows four revenue-declining quarters out of six, a Game Pass subscriber exodus triggered by a 50% price hike, and the departure of long-time gaming chief Phil Spencer in February.

In October 2025, Xbox increased the cost of its Game Pass Ultimate membership by 50% to $30 per month, a change Sharma's memo now admits failed. "Growth slowed and customer churn increased following our price and SKU changes last year," she explained to employees.

Price decreases have been working to counteract the effects of the move, with acquisition and retention increasing. However, Sharma made it abundantly clear in her memo that a rapid fix was not enough, as the Xbox brand cannot be fixed in a single launch or product announcement.

As she looks to turn around the failing division, Sharma has cancelled projects that she deemed to not align with the company's goals. This includes the "This is an Xbox" advertising campaign and any console and mobile development for the company's Copilot AI assistant.

The revamped division will see the leadership team joined by several experts from Sharma's previous role at Microsoft CoreAI, including Jared Palmer, Tim Allen, Jonathan McKay, and Evan Chaki. Sharma appointed the former director of Instacart, David Schloss, to lead the cloud and subscription service.

One detail in the memo attracted immediate attention: Sharma referred to a deliberate shift from "Xbox" to "XBOX" in all caps. Her explanation was pointed. "It reflects a decision to be deliberate in how we show up for the players who care most about this brand," she wrote, an implicit acknowledgement that recent multiplatform and subscription decisions had alienated core fans.