What's Up With Xbox? Unpacking The 'Sunset' Speculation, New CEO's Pledge

Is Xbox on its last legs? One of the platform’s co-founders suspects Microsoft is looking to sunset the Xbox, but the division’s new boss has promised a “renewed commitment to Xbox starting with [the] console.”

In an interview with GamesBeat, Seamus Blackley argues that “Xbox, like a lot of businesses that aren’t the core AI business, is being sunsetted.” He points to the recent departure of longtime Xbox chief Phil Spencer, who is being replaced by Asha Sharma, who most recently served as head of Microsoft’s CoreAI division.

“I expect that [Sharma’s] job is going to be as a palliative care doctor who slides Xbox gently into the night,” Blackley says.

Blackley joined Microsoft in 1999 and pitched the Xbox concept. He left the company in 2002 and joined the Creative Artists Agency, where he represented video game developers. He’s currently the CEO of Pacific Light & Hologram, a startup that’s still in stealth mode, according to its website.

Blackley shows off an in-development Xbox game with Bill Gates in 2001. (Credit: David McNew via Getty Images)

“Microsoft is a company that is now about enabling its customers by enabling AI to drive things,” Blackley tells GamesBeat. Microsoft’s investment in AI dwarfs any other big bets, he suggests. “Everything is a gen AI problem. Whether or not you believe [it’s possible to solve that] is the deciding factor in whether or not you believe Xbox will continue to exist and what you believe Microsoft will do with Xbox.”

Blackley argues that gaming is a proven business model, while generative AI is not. Gamers, he jokes, are not famously tolerant, especially of people outside gaming claiming they know what the industry needs. In an interview with Windows Central, Sharma said she’s currently getting up to speed and will “need to learn…about the ‘why’ of [recent] decisions, what we were optimizing for, and what the data says about the Xbox strategy today.”

In a statement released last week, Sharma argues that Microsoft “will not chase short-term efficiency or flood our ecosystem with soulless AI slop. Games are and always will be art, crafted by humans, and created with the most innovative technology provided by us.”

Recommended by Our Editors

The Xbox console “has shaped who we are. It connects us to the players and fans who invest in Xbox, and to the developers who build ambitious experiences for it,” Sharma adds, though she notes that “gaming now lives across devices, not within the limits of any single piece of hardware.”

“I want to return to the renegade spirit that built Xbox in the first place. It will require us to relentlessly question everything, revisit processes, protect what works, and be brave enough to change what does not,” Sharma says.

This all comes a few weeks after AMD CEO Lisa Su appeared to reveal that the next Xbox will arrive sometime in 2027, “featuring an AMD semi-custom SoC [system-on-a-chip].”