Xbox Has Great Games, but Satya Nadella Says the Business Model Must Change

Satya Nadella says Xbox needs a sustainable business model as Microsoft looks to return its gaming business to growth while continuing to invest in first-party games and its platform strategy.

Nadella says Xbox needs the right business model

Microsoft CEO Satya Nadella said he feels “fantastic” about Xbox’s studios and intellectual property portfolio, as well as the team’s ability to produce strong games.

However, Nadella said Xbox now needs to “invent the right sustainable business model” that allows Microsoft to bring gaming to more people.

Microsoft still plans to operate as both a major game publisher and a platform provider across Xbox consoles and PC.

Xbox is undergoing more streamlining

Nadella also confirmed that the Xbox team is going through “a certain amount of streamlining” under Xbox CEO Asha Sharma. The comments follow recent Xbox layoffs and the earlier June layoffs.

Nadella did not explain what the latest streamlining involves, but said he was pleased with the team’s progress.

Microsoft expects Xbox to return to growth

Nadella said Microsoft plans to return its gaming business to growth during the company’s next fiscal year.

Producing strong first-party games will form another important part of that strategy.

His comments also reinforce Microsoft’s intention to keep Xbox as a platform business rather than shifting entirely toward game publishing.

That strategy comes as Xbox prepares for another busy release week, with 37 new games arriving from September 28.

Via Pure Xbox