Xbox’s Asha Sharma Sounds Alarm on Affordability as Industry Struggles with Rising Costs
In a candid interview with BBC, Xbox CEO Asha Sharma issued a stern warning about the state of the gaming industry, stating that Xbox itself isn’t healthy due to declining revenue and rising costs. With Microsoft laying off 1,600 employees in its “reset” last month, Sharma emphasized that getting back on track will be an uphill battle.
Sharma’s comments come as no surprise given Xbox’s recent financial struggles. Last fiscal year saw a significant drop of 7 percent in revenue, translating to approximately $1.7 billion lost. Hardware, content, and services all took a hit, with component costs skyrocketing due to the growing demand for AI data centers. As a result, console prices have risen multiple times over, making gaming less accessible to consumers.
Sharma’s message is clear: affordability needs to be at the forefront of innovation in the industry. “All of the industry needs to start to innovate on affordability and efficiency,” she told BBC. “That is something that we have not had to do [previously]. But with the crisis that’s currently happening in hardware and components, it is absolutely something all of us need to be thinking about and innovating on.”
The Xbox CEO also hinted at a shift towards digital ownership with the introduction of its disc-to-digital program. While she declined to comment on whether the next-generation console will feature a disc drive, this development suggests that Microsoft is serious about adapting to changing consumer habits.
Sharma’s vision for gaming’s future is undeniably ambitious: “I think it’s on the cusp of becoming the most important form of entertainment for the next century.” However, achieving this goal requires addressing the elephant in the room – affordability. With another 1,600 layoffs expected by the end of the fiscal year, uncertainty and fear are palpable within Xbox.
What does this mean for VR enthusiasts? While Xbox’s struggles may not directly impact our favorite headsets or standalone devices, it highlights a broader issue facing the gaming industry as a whole. Rising costs and prices are driving consumers towards more affordable options, and it’s no secret that PC gamers often turn to digital distribution platforms like Steam or the Epic Games Store for their VR needs.
Sharma’s call to action is clear: innovation must prioritize affordability alongside performance. As we move forward in this rapidly evolving industry, one thing is certain – the next generation of gaming will require significant changes to remain accessible and appealing to consumers. Whether Xbox can lead the charge remains to be seen, but it’s undeniable that Sharma’s message echoes a growing concern within the gaming community: getting back on track requires a renewed focus on making gaming more affordable for everyone.
Source: Game Developer XR — 2026-08-27