Xbox CEO telegraphs stalled gaming growth after $70 billion Activision buyout

Xbox's CEO says the games division is not growing as fast as Microsoft hoped, which is supported by recent financial performance. It's possible that Xbox has hit a slow point following its $70 billion Activision buyout.

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Microsoft has big plans for Xbox: A new console PC hybrid is on the way, Game Pass is getting adjusted, there's a ton of games in development, and the new CEO is promising affordable games, hardware, and services. But there's just one glaring issue; Xbox still isn't growing. What we're seeing now is Microsoft planting the seeds for change, and those are already materializing in the form of new games, surprise Xbox console updates, and even a major Game Pass shakeup.

This revitalization comes at a time when change is sorely needed at Xbox. Microsoft's holiday console revenues just hit a 12-year low through 2025, and the last two quarters delivered the lowest revenues since Microsoft acquired Activision Blizzard King.

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The company spent $70 billion on ABK, and on average, the integration has helped tack on $2 billion to Xbox's quarterly revenues. Microsoft may have devalued--at least temporarily--the prestige Call of Duty brand by launching new games into Game Pass.

Call of Duty is one of the only franchises on the planet that can make billions of dollars via game sales and microtransactions across tens of millions of copies sold, and based on our estimates, the Call of Duty series has made over $35 billion lifetime revenues primarily earned via its former subscription-averse, premium business model.

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Call of Duty being pulled from Game Pass could help spark more revenue. It was said that Call of Duty game sales were down $300 million in 2024.

In a recent court filing, former Activision CEO Bobby Kotick also said that Call of Duty is "on track to perform over 60 percent below last year" due to intense competition.

Fast-forwarding to the current day, current Xbox CEO Asha Sharma now says that Microsoft wants to see growth throughout 2027. Puiling Call of Duty day and date releases out of Game Pass was a double-punch combo to this effect: Gamers now have to buy new games at $70, preserving COD's sales, and Game Pass is now $23/month, which is much more affordable than the previous $30.

In a recent interview with Game File, Sharma shared three sentences that said a whole lot:

"I can't share guidance on what's going to happen in general. We are wanting to see Xbox return to growth next year ,and so we've got work to do. There's no silver bullets, and our focus is going to be: how many players are playing every single day in the Xbox ecosystem?"

The last part is also interesting because it lines up with what Sharma had previously said about Xbox's core focus.

Microsoft is prioritizing daily active players, a metric that emphasizes expansion across all platforms, geographies, and modalities of play--from consoles to mobiles to game streaming, and everything in between.

This leaves everyone speculating whether or not Project Helix will actually be out in 2027, but Sharma's words discuss far more than another console, even if it also plays PC games.

Xbox's trajectory is all about reaching out, delivering content and services to multiple endpoints, and maybe even creating and pioneering in some new ones--like cloud gaming, including ad-supported options--to help create the opportunities for the growth that the company seeks.