Microsoft’s Xbox division prepares another round of personnel reductions and potential studio shutterings slated for announcement July 6, as new CEO Asha Sharma implements her reset strategy amid ongoing revenue shortfalls.

The June 10 internal memo from Sharma and chief content officer Matt Booty cited a three percent accountability margin, elevated console component costs driven by memory shortages, and an overextended studio portfolio following pandemic-era acquisitions. Bloomberg and The Verge reports indicate the cuts target at least five studios with possible spinoffs or closures, alongside project cancellations such as the Marvel’s Blade title at Arkane.

Recent actions already include the shutdown of Ninja Theory and negotiations involving Compulsion Games and Double Fine, with Undead Labs also flagged in coverage. IO Interactive separately announced staffing reductions tied to the end of an external partnership on Project Fantasy.

Console pricing adjustments taking effect August 1 further illustrate the hardware pressures, with Series S models rising to $499.99 and Series X configurations seeing increases up to $150. The division’s fiscal challenges continue despite substantial prior investment.