Xbox CEO Asha Sharma is reportedly redirecting resources to speed up development on new The Elder Scrolls, Fallout, and Halo games while Microsoft weighs restructuring or spinning off its gaming branch entirely. The plan was detailed in a report from The Information, which cited three people with direct knowledge of the discussions, and was picked up widely on 12 and 13 June. As of 15 June 2026, Microsoft has not finalised the budget behind the push, and no new release dates have been attached to any of the franchises involved.
The report lands during a turbulent stretch for Xbox, coming just days after the brand confirmed plans to “reset” its gaming wing and warned of major layoffs scheduled for July.
What Asha Sharma Reportedly Wants To Change
Sharma, who took over as CEO of the gaming unit in February 2026, plans to increase spending on Microsoft’s most successful franchises to get new games out faster. Halo, The Elder Scrolls, and Fallout are the named priorities, with the latter two said to be of particular interest. Sharma also reportedly wants to invest more in Minecraft, which has been trailing Roblox.
The strategy involves cutting lower-performing studios and projects and redeploying those resources into the major franchises rather than expanding the overall budget. The game development budget across the Xbox portfolio is reported to stay flat for the 2027 fiscal year, with money pulled from some areas to accelerate others. There is no word on exactly how Microsoft intends to allocate those resources or when new installments would be intended to launch.
Microsoft CEO Satya Nadella and finance chief Amy Hood have signed off on Sharma’s plan to boost spending on top-tier game development for the fiscal year beginning in July, though the budget has not been finalised and could still change.
The Timeline Problem Behind The Push
The franchises in question carry some of the longest gaps in the industry. It has been five years since Halo Infinite launched, and this year’s Halo: Campaign Evolved is only a remake of the first game’s single-player content. The most recent mainline Fallout arrived in 2015, more than ten years ago. The Elder Scrolls has not had a new release since Skyrim in 2011, putting the series past eight years since The Elder Scrolls 6 was first revealed.
The Elder Scrolls 6 still appears to be years away, with Fallout 5 not expected until well after that. It is also unclear whether the push would fast-track long-awaited mainline entries specifically, or instead spin-offs and remasters such as the rumoured Fallout 3 remaster. Bethesda has discussed all of these in the past without committing to a release date, meaning they could still be years out even if prioritised.
Speeding up development while budgets across the industry keep climbing is a difficult problem, and one that could take years to resolve. Last year’s remake of The Elder Scrolls 4 outperformed many of the newer releases that launched alongside it, and new entries in Halo, Forza Horizon, and Fallout remain reliable best-sellers, which is part of why the strategy leans on them.
Microsoft Has Not Ruled Out Spinning Off Xbox
Alongside the development push, Microsoft is reportedly considering options for the Xbox unit that include a potential spin-off or restructuring it as a wholly owned subsidiary. The company is also weighing a joint venture with other partners, a move that could make the gaming business easier to sell. No restructuring is described as imminent, but all options are said to remain on the table.
Microsoft already operates LinkedIn and GitHub as wholly owned subsidiaries, a model that could serve as a blueprint for Xbox. Such a structure could let the 25-year-old gaming branch keep operating inside the company, just with more distance from the wider Microsoft umbrella. For now, Microsoft’s stated goal is simply to make Xbox a more successful part of its business.
How quickly Sharma’s plan delivers results could indicate which path Microsoft eventually takes. In the short term, it still means heavy layoffs across Xbox in July, potentially reaching many of the studios the company spent the past decade acquiring. Microsoft had not responded to a request for comment at the time the report circulated.
How Fans Reacted
The community response centred on a single question: whether throwing money at a franchise this late actually speeds anything up. A recurring view was that The Elder Scrolls 6 is already too far into development for extra funding to matter, with several users arguing the money is more likely to benefit Fallout 5, a future Elder Scrolls title, and potential spin-offs than to move the current project’s date.
One frequently raised theory was that additional funding would expand Bethesda’s team so it could work on The Elder Scrolls and Fallout simultaneously, splitting the studio rather than accelerating one game. Others pushed back on the premise entirely, framing “getting games out faster” as a likely path to crunch, and pointing out that adding developers mid-project often slows things through onboarding and scope creep rather than speeding them up.
Skepticism extended to motive. Several commenters tied the move to Microsoft’s wider financial pressure on Xbox, noting Nadella’s recent remarks that the division has to become a sustainable business, and questioned whether the focus on consistent moneymakers signals the gaming arm retreating to its safest bets.
What Happens Next
Microsoft’s 2027 fiscal year begins in July, the same month the Xbox layoffs are due, which is when any material change in investment into Bethesda and Halo Studios would start to take shape. During a Hard Fork appearance, Nadella said Sharma was going to take a fresh look and make sure Xbox delivers on what fans expect, adding that the company has to turn it into a sustainable business.