\u201c[Microsoft CEO] Satya Nadella has made an incredible number of bets and invested an incredible amount of money and credibility in the transform model AI future,\u201d Blackley said. \u201cXbox, like a lot of businesses that aren\u2019t the core AI business, is being sunsetted. They don\u2019t say that, but that\u2019s what\u2019s happening.\u201d<\/p>\n
Xbox co-founder predicts console will be phased out under new CEO<\/p>\n
Blackley forecasted that Xbox\u2019s days may be numbered under the new CEO of Microsoft\u2019s gaming department.<\/p>\n
\u201cI expect that the new CEO [of Microsoft Gaming], Asha Sharma\u2019s job is going to be as a palliative care doctor who slides Xbox gently into the night,\u201d he said.<\/p>\n
As artificial intelligence has taken a front seat in many leading tech companies across the U.S., Microsoft said its leadership will view its video games with an \u201cabstract\u201d mindset, similar to how it views AI.<\/p>\n
\u201cThe natural consequence of the focus on AI is that AI abstracts every problem from the minds of the executives who believe in it. We\u2019re abstracting the problem of games as well,\u201d Blackley told GamesBeat\u2019s Dean Takahashi. \u201cThere\u2019s a core belief \u2026 that AI will subsume games like it will subsume everything.\u201d<\/p>\n
\u201cThe job of all these people is to just gently usher all of these business units into the new world of AI. That\u2019s what you\u2019re seeing here,\u201d he continued. \u201cWhether or not you agree with it, whether you agree with AI having the potential to do that, whether AI will be successful, is a separate matter.\u201d<\/p>\n
Microsoft initially released its highly coveted Xbox in 2001, after Sony\u2019s PlayStation already held a majority share of the gaming console market, competing with the likes of Nintendo\u2019s Nintendo 64 and Sega\u2019s Saturn.<\/p>\n
Since its inception, the Xbox has seen three additional generations, with the Xbox 360 releasing in 2005, the Xbox One in 2013, and the Xbox Series S and Series X releasing in 2020.<\/p>\n
Over the years, gaming fans have pitted the two larger consoles, Xbox and PlayStation, against each other, creating the \u201cconsole wars.\u201d<\/p>\n
Xbox hardware sales struggle with double-digit declines each quarter in years-long slide<\/p>\n
Xbox, as of late, has been struggling to sell its hardware, with year-over-year declines of 29% in quarter one (Q1) of 2026, according to IGN<\/a>. In Q4 of 2025, hardware sales were down 22% as well. From Q2 2024 to Q3 2025, Xbox\u2019s hardware revenue was down at least 29% in each quarter, with a whopping 42% revenue decline in Q4 of 2024.<\/p>\n In light of Xbox\u2019s poor hardware revenue, Blackley took aim at Microsoft CEO Satya Nadella, who assumed the position in 2014, and has been outspoken about the company prioritizing AI.<\/p>\n \u201cI think younger me would be screaming about this and saying, \u2018What the hell? Why would you put somebody in charge of a record label who didn\u2019t like records?\u2019 Looking at it now from my perspective \u2026 I do still feel that way,\u201d Blackley said. \u201cBut at the same time, I understand exactly why it is. I know that, again, Satya is holding a hammer and everything is a nail.<\/p>\n \u201cThere\u2019s a nail with an Xbox logo on it. He\u2019s applying the AI person to it. He has to show shareholders and the press and the world that he is all in on this investment,\u201d he continued. \u201cHe has to show them that he believes generative AI is going to fix games and make it profitable. He has to make this move. It doesn\u2019t matter what you think about it. I don\u2019t think he had any choice.\u201d<\/p>\n Follow Jason Sutich\u00a0on X<\/a>.\u00a0Send\u00a0news tips here.<\/a><\/p>\n
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