Xbox CEO says mobile to play key role as Microsoft restructures gaming business

• Xbox will focus more heavily on its console business and high-growth franchises.
• Helen Chiang becomes Xbox's first chief operating officer.
• Rising hardware costs and declining revenue prompted the strategic reset.

Xbox CEO Asha Sharma is placing greater emphasis on mobile and PC as part of a sweeping restructuring at the company.

In an interview with Fortune, Sharma said the changes are part of a "fundamental reset" after Xbox spread itself across too many areas.

Sharma said the company's new strategy will centre on its flagship Xbox console, which accounts for 80% of the business. At the same time, she stressed that Xbox must expand beyond consoles, saying the platform needs to be available on mobile and PC.

Mobile focus

Xbox is cutting around 3,200 jobs, representing 20% of its workforce, while also spinning off five studios and reorganising its operations.

According to Sharma, Xbox has invested more than $20 billion in content and hardware over the past five years, excluding Activision Blizzard, yet annual revenue has declined by nearly half a billion dollars.

She added that rising hardware component costs, an overextended studio network and underinvestment in key franchises have contributed to the division's challenges.

“In order to grow, we made a bunch of bets … and as we did that, we inherently didn’t focus on the core business,” she said. “The number one measure of your strategy is what you put your resources behind, and we simply spread ourselves too thin.”

There are also plans to direct more investment towards high-growth franchises such as Minecraft. Moving forward, Mojang Studios and Candy Crush maker King will report directly to Sharma.

The restructuring also introduces Xbox's first chief operating officer Helen Chiang, who will oversee profits and losses across content, hardware, platform and services.