Two weeks ago there was a buzz in the air inside Microsoft’s studio D building. Hundreds of Xbox employees gathered early on a Thursday morning, packed into the hallways and atrium, to hear from Xbox CEO Asha Sharma. The “return of Xbox” slogan was plastered all over the walls of the building, the same message Sharma first delivered to Xbox employees in February. It was time for Sharma to rally the troops, after two years of turbulence, and hint at the future of Xbox.
During the roughly 40-minute all-hands, sources tell me that Sharma laid out a four-point action plan for Xbox employees, focusing on several areas in turn: hardware, games, platform, and services. “We have to be honest about where we are. We’ve got work to do,” admitted Sharma. “Players are frustrated with us, they feel like we haven’t updated our console enough, they feel like our PC presence isn’t very strong.”
The answer to those frustrations is what many Xbox employees and fans had been hoping for, a renewed focus on fixing things for the existing audience of Xbox. “We’re going to start by restoring our core. We have to fix the fundamentals on console and PC. We have to sweat every single detail and every single part of the experience to get to fun much faster and make it simpler,” Sharma told Xbox employees.
Microsoft used to ship interesting new Xbox features every month, but over the past year the company hasn’t done enough of that. Sharma quickly started instructing Xbox engineering teams to work on highly requested console features in early March, in an early effort to make her mark on Xbox and impress fans. But during the all-hands meeting, she went a step further and promised biweekly console updates until the end of the year.
Most of the all-hands felt like a coach hyping up a sports team, according to Xbox employees I’ve spoken to. Sharma also dropped the Microsoft Gaming name, reverting the organization back to just Xbox. It’s a “we are Xbox” change that multiple Xbox employees tell me has gone down well internally.
Sharma also briefly addressed another Xbox fan pain point during the all-hands: exclusivity. More than two years ago, Microsoft revealed that four Xbox-exclusive games were coming to PS5 and Nintendo Switch. It was the start of an initiative, codenamed Project Latitude, to grow Microsoft’s gaming revenues beyond the company’s Xbox consoles. Latitude was a response to Microsoft CFO Amy Hood’s increased margin targets for the Xbox division, but it has upset the hardcore Xbox fans, and it’s never been clear how many games would ultimately release on PS5.
“We will reevaluate our approach to exclusivity,” Sharma told employees. Sources tell me Sharma has been evaluating a range of options for Xbox exclusive games, but is treading carefully here and isn’t yet ready to commit to any major changes. Exclusivity is a thorny issue for fans, particularly because there has been a lack of clarity on Microsoft’s strategy here over the past two years.
Sharma is now focusing on winning back fans, either way. “We will focus on players coming back every single day, because our platform and our games are great. We have to execute really well to get there, and we’re going to do that in a four-point plan, and it starts with hardware,” Sharma told employees.
Software improvements to existing consoles are rolling out, but looming in the background is the next-gen console, codenamed Project Helix. One of the first things Sharma did after getting the Xbox CEO job was announce Helix in a post on X, promising that the next Xbox console “will lead in performance and play your Xbox and PC games.”
Alpha versions of Project Helix are heading to developers in 2027, so the next generation of Xbox is still a ways off. Sharma didn’t reveal much more about Project Helix during her all-hands, though. “We have to deliver Project Helix as a big step forward, for our console games and also our PC games, as well as performance and security,” said Sharma.
Microsoft still hasn’t answered exactly how Project Helix will run both Xbox console games and PC titles. Is it a PC underneath? Does it still use the Xbox OS? It feels like we’re going to be waiting a little while longer for answers to these questions, but the reinvestment in the Xbox console and Xbox OS is intriguing after a lack of updates.
Sharma also stressed the need to improve the overall Xbox platform in her all-hands, so it’s no surprise that earlier this week she announced a reorganization of the platform team that focuses on adding more technical expertise.
Jared Palmer is joining Xbox as VP of engineering and a technical adviser to Sharma. Palmer hasn’t even been at Microsoft a year, after originally joining in October as GitHub’s senior vice president. Sharma also hired Tim Allen to lead Xbox design, and bring together design, design engineering, and research. Allen was also part of CoreAI, and GitHub’s senior VP of design and research. Jonathan McKay and Evan Chaki have also joined from CoreAI.
It doesn’t take a genius to connect the dots here and see that a bunch of former CoreAI executives have moved over to Xbox. Microsoft was clearly ready for the obvious reaction from gamers to a bunch of AI people joining Xbox, so hours after the leadership changes memo Sharma announced that the mobile Copilot gaming feature would be scrapped and that development of Copilot for Xbox consoles will cease. It was an easy win, but it also masked the reality that many people are leaving CoreAI at the moment, Sharma included. I think this speaks volumes about CoreAI leadership, rather than some effort to inject AI into Xbox.
Sharma is hoping the former colleagues she’s brought into Xbox will provide the necessary experience to drive the Xbox platform forward. “Right now, it is too hard to ship impact quickly; we spend too much time inward instead of with the community; and we lack the capability we need in some key areas,” Sharma wrote in a memo this week seen by Notepad. “We are promoting leaders who built Xbox and bringing in new leaders with consumer and technical expertise we do not yet have. This will allow us to go deeper in the areas that matter most and move faster.”
Jason Ronald, who is accountable for Project Helix, is being promoted, but Xbox is also losing Roanne Sones to a “leave of absence.” Sones has been liaising closely with OEMs to make things like the Xbox Ally devices from Asus a reality. Kevin Gammill, corporate vice president of Xbox user experience, is also stepping down after nearly 20 years at Microsoft.
This Xbox platform shakeup is designed with a goal to “build a platform that is affordable, personal, and open by staying close to the work and the people we serve,” according to Sharma. Microsoft has already flirted with a more open Xbox platform with the Xbox Ally devices, running Windows at the core and an Xbox-like experience on top. The big question is: How does Microsoft keep the next generation of Xbox consoles “affordable” during a RAM crisis?
I’m still convinced that the answer is OEMs like Asus. Sharma didn’t address this directly in her all-hands, but she did drop a hint about more choices for Xbox hardware in the future. “Because we want to be where the world plays, we will build our own great hardware but we will also build a strong ecosystem that’s going to expand choice and reach for us in the future,” said Sharma.
That could be why there’s an increased focus on the underlying software platform from Sharma, including improving both the Xbox and PC sides. Microsoft has never really delivered on its Xbox on PC promises in the past, but right now that seems like a critical thing that Sharma needs to get right for Project Helix and the “return of Xbox.”
- Microsoft is finally ditching the junk MSN feed in Windows widgets. After allowing Windows 11 users to disable the MSN feed in Windows widgets more than two years ago, Microsoft is now finally removing this junk feed when you open widgets. Instead, you’ll actually get widgets when you activate widgets! I don’t know why, other than a tiny bit of revenue, it has taken Microsoft so long to fix this obvious mistake, especially when the MSN feed was full of total junk news articles.
- Microsoft tests redesigned Windows 11 Run menu with dark mode and more. Microsoft started testing its much-needed refresh of the Run prompt in Windows 11 last week. It comes with a modern interface and support for dark mode and crucially integrates the excellent Command Palette features. Despite making these changes, Microsoft revealed that the new Run prompt will open faster than the existing one across a variety of hardware. Some Linux fans took to X this week to mock Microsoft’s improvement from a 103ms to 94ms median time-to-show time, but the reality is that most Windows users who use Run will see it instantly appear just like before.
- Microsoft wants lawyers to trust its new AI agent in Word documents. Microsoft has launched a new AI agent inside Word that’s designed for legal teams. “Legal Agent” will handle document edits, negotiation history, and even complex tasks like reviewing contracts. This new AI assistant arrives just months after Microsoft hired a bunch of AI specialists and engineers from Robin AI a few months ago, a failed startup that was working on an AI-powered contract review system.
- Xbox owners can now disable Quick Resume for specific games. I love Quick Resume on Xbox, but I’ve always wanted to disable it for multiplayer games as it’s often more of a hindrance than a help for titles that require a constant internet connection. Microsoft is now rolling out the option to disable Quick Resume on individual games, alongside the ability to set custom colors across the Xbox dashboard.
- Microsoft’s Office and LinkedIn chief now runs Teams in latest reshuffle. It wouldn’t be May or June without more reshuffling at Microsoft ahead of a new financial year. On the same day as the mini Xbox reorg, Microsoft also shuffled around some of the teams that report to departing experiences and devices chief Rajesh Jha. The Microsoft Teams organization is now joining a new “Work Experiences Group” at Microsoft, run by Ryan Roslansky. The former LinkedIn CEO took on an expanded role at the company as head of Office last year, and appointed Daniel Shapero as the new CEO of LinkedIn last week. Shapero will report to Roslansky, which is unusual as most CEO appointments at Microsoft have typically reported directly to Satya Nadella in the past. Charles Lamanna, who has risen quickly through the ranks at Microsoft, is also taking on more responsibilities, with Microsoft 365 Core, OneDrive and SharePoint (ODSP), and Data Platform and Growth (DPG) all joining Lamanna’s Copilot, Agents, and Platform (CAP) team.
- Xbox changes continue with new console boot animation. Microsoft is getting ready to ship a new Xbox boot animation and slightly tweaked boot-up sound next week. Xbox CEO Asha Sharma revealed the new boot animation in a post on X this week, just a day after the first major organizational changes at Xbox. It’s another example of the type of console updates that Sharma has prioritized.
- Microsoft and OpenAI’s definition of AGI has been revealed. In the ongoing Musk v. Altman trial, Microsoft has been mentioned plenty of times. This week the famed 2019 contract between Microsoft and OpenAI was made public, and the 36-page document defines artificial general intelligence as “a highly autonomous system that outperforms humans at most economically valuable work.” This matches OpenAI’s public definition, too. If you read my Notepad issue last week, you’ll know that the AGI clause has now been stripped out of Microsoft and OpenAI’s agreement, as the pair continue to go their separate ways.
- Microsoft’s Xbox mode is now available for all Windows 11 PCs. Microsoft has started slowly rolling out its Xbox mode to all Windows 11 PCs. The mode adds a full-screen interface to the Xbox PC app, similar to Steam’s Big Picture Mode. It originally debuted as the awkwardly named “Xbox Full Screen Experience” with Asus’ Xbox Ally devices, but over the coming weeks all Windows 11 PCs will be able to activate it.
- Here’s what Microsoft is offering long-serving employees to voluntarily retire. I managed to get some details on Microsoft’s voluntary retirement offer to long-serving employees this week. Microsoft accidentally posted the terms of the deal to its internal HR website a day early, revealing that some Microsoft employees will be offered a package of healthcare, cash, and stock vesting if they voluntarily retire. The buyout is only being offered to US employees whose combined years of service added to their age totals 70 or more. Most of the Microsoft employees I’ve spoken to about the buyout think it’s barely any different to what you’d get if you were laid off at Microsoft — apart from the healthcare access. It will be interesting to see just how many long-term Microsoft employees take this offer.
- Microsoft reportedly in talks to ax its key energy pledge. Microsoft is reportedly in discussions to end a clean-energy target to allow it to push ahead with more AI data centers. Bloomberg reports that the company is debating whether to delay or abandon its 2030 target of matching 100 percent of its hourly electricity use with renewable energy purchases. No final decision has been made, but it would be a significant walk back if Microsoft dropped its pledge. Microsoft made the commitment in early 2020, ahead of the demand for AI data centers.
- Copilot Cowork is now available on iOS and Android. Cowork runs in the cloud to let Microsoft’s Copilot assistant complete tasks whether your PC or laptop is running or not. Now, Microsoft is launching iOS and Android versions of Cowork so Copilot users can create tasks on the go. Copilot Cowork is available through Microsoft’s Frontier program, a preview of emerging AI features that the company is working on.
I’m always keen to hear from readers, so please drop a comment here, or you can reach me at notepad@theverge.com if you want to discuss anything else. If you’ve heard about any of Microsoft’s secret projects, you can reach me via email at notepad@theverge.com or speak to me confidentially on the Signal messaging app, where I’m tomwarren.01. I’m also tomwarren on Telegram, if you’d prefer to chat there.
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