Sharma wants ‘industry leading margins,’ which means Xbox needs to 5x its operating margin in four years.
Xbox is lagging behind Sony and Nintendo when it comes to several factors, but CEO Asha Sharma has chosen to focus on operating margins. In a recent internal memo, Sharma has expressed an ambition for Xbox to be leading the pack for operating margins. This comes at a time when Xbox is sitting in single digits figures for its accountability margin and cutting 3,200 of its workforce.
An internal memo from Xbox was obtained by CNBC on July 30, 2026. The memo was written by Xbox CEO Asha Sharma to staff and focused on the long-term plans for the brand. In it, Sharma wrote that it is Xbox’s ambition is to have industry leading margins by its fiscal year 2030.
As it stands, Xbox is currently operating at a three percent accountability margin, down year-over-year, according to a June 10 post from Sharma and Chief Content Officer Matt Booty. The industry margins, which she wants the Xbox brand to lead, is three to five times higher than Xbox’s three percent.
Sony’s FY25 Games & Network Services operating income ratio is 9.88 percent, according to page 10 of its report. Nintendo is currently sitting at an operating profit ratio of 15.6 percent, based on page 8 of its FY2026 report. This puts Xbox significantly behind its competition. Not only is it behind, but it’s margins have decreased year-over-year.
The same memo saw Sharma express an interest to invest in Minecraft “more than ever before.” Meanwhile, Xbox has been whittled away, with 3,200 employees laid off and several studios being released as independent operators.
It appears to be quite the steep climb for Xbox to become industry leaders in the operating margin space. However, with PlayStation ending physical disc production, it could be an opening for Xbox to take a shaky step toward its goal – provided it doesn’t make as similar announcement.
Sharma has made similarly loft goals known, recently stating she wants Xbox to entertain “more than a billion people each day,” which PC Gamer notes is “24 times more than the peak population of Steam.”
How Sharma plans to do this, while the industry struggles with a lack of DRAM and storage and soaring prices, is anyone’s guess. In order for there to be more players, there needs to be more consoles to buy, at a price point that is actually reasonable. Even trillion-dollar company Apple is anticipating increased prices for hardware thanks to “significant constraints,” in the supply chain.
Stay tuned to our Xbox page to see whether the company can hit Sharma’s goal within the next four years.
Shacknews staff does not use generative artificial intelligence (AI) in their content. Shacknews strictly prohibits the use of its content for AI training or to generate text, including text in the style or format used for this publication. Shacknews reserves all rights to this work.
