Microsoft's gaming brand is set to undergo some changes over the coming months, with the company sending out a message to employees around the world this week teasing changes to behind the scenes.
In a post titled Next 100 days: Xbox Resent, which was originally sent to staff, CEO Asha Sharma and chief content officer Matt Booty wrote: "Over the first 100 days together, we have started to revive Xbox."
Meanwhile, Bloomberg and Eurogamer have reported that cuts are coming.
In the wake of Games Showcase, the Asha and Matt insisted in their blog that they need to "have both optimism and realism as we work to reset the business".
They said: "We will end this fiscal year at about a 3 percent accountability margin, down year-over-year.
"Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform, and hardware subsidy, but our annual revenue has declined nearly half a billion during that time.
"Going forward, this cannot continue."
Asha also discussed a "hardware component crisis", with the costs for console storage components continuing to soar.
She continued: "As we plan for the 2027 holiday season, we expect another significant increase, taking us over 5x the prices we paid only two years earlier. Memory costs have followed a broadly similar trajectory.
"While the entire industry is facing a components crisis, we believe we have been impacted more greatly than many of our peers due to the choices we made over the last half decade.
"We are currently unable to make as many consoles as players want to buy, and we need a new business model and partnerships for hardware as we remain committed to Helix."
Meanwhile, the executives noted that Xbox's "current platform infrastructure is not built for the battle ahead".
They said: "For some of you, these realities will be surprising and even frustrating to discover.
"We won’t succeed by hiding hard truths, nor will we succeed by doing the same thing and expecting different results.
"Like the ‘everyday wins’ mentality from the first 100 days, we will sprint to make progress against hardware, content, experience, and services together."
