Xbox’s new chief executive, Asha Sharma, and chief content officer Matt Booty sent a public memo to staff as she marks her first 100 days. The note frames the company’s financial strain and the need for a new strategy, pointing out a troubling gap between revenue growth and investment.

Over the past five years, Xbox has poured more than $20 billion into content, platform and hardware subsidies while annual revenue slipped nearly half a billion. The memo bluntly declares that this imbalance cannot continue and signals that a new business model is urgent.

The letter also cites the “RAMaggedon” shortage that limits console supply for the upcoming Project Helix. Sharma says Xbox must forge new hardware partnerships to meet demand, while acknowledging that the company still cannot sustain the numerous studios acquired in the late 2010s. Competition, she notes, is now about capturing attention.

Although the memo stops short of announcing layoffs, Bloomberg reports suggest cuts could begin in July, after Microsoft’s fiscal year ends on June 30. Thousands of jobs have already been cut in 2024 and 2025, and the current trajectory hints that further reductions are inevitable. Xbox must balance creative ambitions with shareholder expectations.