XBOX future given stark warning by Microsoft CEO Satya Nadella

Microsoft CEO Satya Nadella has given XBOX a stark warning when discussing its future.

XBOX CEO Asha Sharma recently shared a memo to employees, which was then shared publicly by XBOX, saying the gaming division's heavy spending and revenue decline can't go on.

And speaking on The New York Times' Hard Fork podcast, Nadella reiterated XBOX's performance must improve.

He said: "No one can accuse Microsoft of not having invested for the last 25 years and now we have to turn this into a sustainable business.

"There's more monetisation of Xbox games happening on YouTube than at Microsoft."

The Information reports to make XBOX sustainable, Microsoft is considering a potential spinoff of restructuring as a wholly owned subsidiary. It's understood no restructuring is imminent but all options remain on the table.

This comes after Sharma and XBOX chief content officer Matt Booty shared the financial position XBOX finds itself in, being incredibly open about its performance in the internal memo.

"We will end this fiscal year at about a three per cent accountability margin, down year-over-year," it said.

"Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform and hardware subsidy but our annual revenue has declined nearly half a billion during that time.

"Going forward, this cannot continue."

There are some reports XBOX is planning for more major layoffs but this has not been confirmed by the company.

Additional reporting by Reuters.

Elsewhere from Indy100:

• XBOX CEO Asha Sharma asked expert if brand is 'fixable'
• XBOX CEO reveals crucial Project Helix update amid 'component crisis'

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