Microsoft's Xbox gaming division is facing a strategic challenge as CEO Asha Sharma emphasises the importance of creating new intellectual property (IP), even as the business undergoes significant restructuring, layoffs, and project cancellations.
Speaking during an internal town hall meeting, Sharma reportedly said Xbox must continue developing original game franchises rather than relying exclusively on established titles. She stressed that the company needs to reach new audiences through fresh ideas while continuing to invest in its strongest existing franchises.
The comments come after a series of major changes across Xbox's gaming operations, raising questions about how the company will balance creative experimentation with its focus on commercially successful games.
According to PC Gamer, Sharma's remarks were shared through reporting by Windows Central.
Why Does Xbox Need New Intellectual Property?
In gaming, intellectual property refers to original characters, stories, worlds, and game franchises that a company owns or has the rights to develop.
Established franchises such as Halo, Fallout, Forza, and Gears of War already have recognisable identities and established audiences. However, relying too heavily on existing properties can limit a company's ability to attract players with different interests.
Sharma reportedly told employees that Xbox wants its strongest franchises to become major global businesses while continuing to create original titles that can develop into long-lasting properties.
New IP can help a gaming company:
Reach audiences who may not be interested in existing franchises.
Build new communities and gaming experiences.
Create opportunities for future sequels, merchandise, and adaptations.
Reduce long-term dependence on a limited number of established properties.
Developing a successful new franchise, however, requires time, investment, creative talent, and a willingness to accept commercial risk.
Layoffs and Project Cancellations Raise Questions
Xbox's call for more original games comes amid substantial organisational changes.
Reports have described thousands of job cuts across Microsoft's gaming business, alongside project cancellations and changes to studio ownership and operations.
Several studios associated with original projects have been affected by the restructuring. Double Fine and Compulsion Games, for example, have moved outside Microsoft's first-party studio structure, while other teams have faced uncertainty over projects and their future direction.
The changes have prompted questions about whether studios will have enough resources and creative independence to develop new franchises.
The contrast is particularly notable because developing original IP often requires sustained investment before a game generates revenue. Companies must balance that long-term commitment against the pressure to control costs and prioritise established titles.
Xbox Wants to Strengthen Existing Franchises Too
Sharma's reported comments do not suggest that Xbox intends to abandon its established franchises. Instead, the company appears to be pursuing two goals: expanding its best-known series and developing new properties that could attract different audiences.
This approach could involve investing in established titles while working with external developers and creative partners on new projects.
Xbox has also pursued partnerships with Hideo Kojima's studio for projects including OD and Physint, providing potential routes to new gaming experiences beyond its existing franchises.
However, partnerships alone will not resolve the challenge of maintaining a steady pipeline of original games. Xbox will also need to determine how much funding, time, and creative autonomy its development teams receive.
What This Means for the Gaming Industry
The situation reflects a wider challenge across the video game industry. Development costs have increased, competition for players' attention is intense, and publishers face pressure to demonstrate that large investments can produce sustainable returns.
Established franchises can offer a more predictable audience, but excessive dependence on familiar properties can make portfolios less diverse. Original games provide opportunities for innovation, although their commercial performance is difficult to predict.
For gaming companies, the challenge is to create a portfolio that combines reliable franchises with carefully supported creative experimentation.
The key question for Xbox is whether its restructuring can reduce costs without weakening the teams and development processes needed to produce original games.
