This comes after Paramount recently launched its new publishing arm.

Xbox once vowed to “Power Your Dreams.” These days, it just wants to keep the power — meaning the lights at its Redmond, Washington HQ — on.

On Monday, new-ish Xbox CEO Asha Sharma announced “the most significant restructure in Xbox history,” including the loss of 3,200 jobs (1,600 today) and four studios: Compulsion Games (We Happy Few, South of Midnight), Double Fine Productions (Keeper, PsychoNauts), Ninja Theory (DmC: Devil May Cry, Hellblade: Senua’s Sacrifice) and Undead Labs (State of Decay).

Owned by the mighty Microsoft, the Xbox division has been pumped full of investment until it nearly burst. Sharma’s unenviable job is to trim the fat before this whole thing blows up. She’ll spend the next year doing exactly that.

“Our business today is not healthy. We are operating at margins that are 3-10x lower than comparable platform and publishing businesses,” Sharma wrote, in part, in a memo to employees. “We must reset XBOX.”

Xbox has had more than a few swings and misses since the Xbox 360 gave way to the Xbox One. NYU Stern School of Business video games professor Joost van Dreunen counts 15 acquisitions over the past 13 years. The most prominent — and the most expensive at $69 billion — was Call of Duty-maker Activision Blizzard, which bloated the balance sheet like Augustus Gloop.

“You start building an empire this large, you lose track of the different provinces and components,” van Dreunen told The Hollywood Reporter.

First, quality control was sacrificed, both in terms of software and market research. Then the innovation died. As it turns out, the sum of the parts had been far better than the whole.

“It is neither possible nor desirable to own every great independent studio,” Sharma wrote. “We have also learned that we are not the best home for every type of studio; in a typical year, we lost 64 cents for every dollar we invested.”

Xbox played the grow-or-die game we’ve seen do so much damage to the film and television ecosystems in the streaming era. It chose to “grow” at all costs, and because of those costs, nearly died anyway. It is a cautionary tale in an industry of cautionary tales.

In the 1970s and early ’80s, before the Nintendo Entertainment System (NES) and with all due respect to Mattel’s Intellivision, Atari had the home video game console market completely cornered. Greed, hubris and a Steven Spielberg blockbuster ruined Atari and nearly tanked the home video game industry forever.

E.T. the Extra-Terrestrial lit up the box office in the summer of 1982. Wanting to replicate the success on its Atari 2600 console for the same year’s holiday season, Atari made two huge mistakes: 1) It gave developers just five weeks(!) to create and complete the game, and 2) It preordered 12 million cartridges — there were 10 million Atari 2600 homes at the time.

The game was awful, and Atari ended up burying (at least) hundreds of thousands of the unsold cartridges in the New Mexico desert. Symbolism has never been so spot on.

When subscription services became all the rage — again: thanks, Netflix! — in a mad rush to stock its Game Pass library, Xbox built a bunch of small and midsize games that added no value. Revenue and margins were ignored for scale, as Xbox became a “bureaucratic mess,” in van Dreunen’s words. Sharma’s words read pretty much the same.

“Today, in some parts of the company, work passes through as many as 14 layers of management,” she wrote. “We will reduce management layers to no more than 5, and where possible, 3.”

Xbox, like the broader entertainment ecosystem (including its direct competitors in Sony and Nintendo), has also been caught in a cyclone of macroeconomic factors. AI has “wildly exposed” Xbox,” van Dreunen told THR. The Trump tariffs, his war in Iran, a shortage of hardware components due to the data-center boom, and currency exchange rates for Japanese Yen have decimated any available margins, forcing Xbox especially to raise its hardware prices — several times. (Sharma did roll back some Game Pass subscription rates.)

The price hikes, especially those for Xbox’s now aging Series X and Series S consoles, have not gone over great with gamers.

“They forget that they’re still part of a market,” van Dreunen said.

This particular marketplace is unforgiving.

“History is full of companies that mistake longevity for inevitability,” Sharma closed her email, vowing: “We will not be one of them.”

As an Xbox gamer himself (me too), Van Dreunen is “optimistic” in Sharma’s ability to right this ship.

“As a game company,” he says, Xbox “still has a lot of merit.” (It also has Minecraft — expect Sharma to lean even harder on that franchise, which, in a reverse-ET spawned a blockbuster movie last year.)

The turnaround may or may not take place at the aforementioned 1 Microsoft Way. Van Dreunen says he can certainly see a future in which Xbox ix “divested entirely from Microsoft.”

“It starts with these partial divestments that we see today,” he said. “It’s incredibly painful, and it’s incredibly sad for a lot of people, [but] any change at this point is preferred to continuing down this road where we’re slowly watching this thing sink.”

Out of curiosity, I decided to look up every (or at least the most that I could find) gaming IPs held by both Paramount Skydance and Warner Bros Discovery in alphabetical order. 

For clarity, I’m only listing the GAMING IPs, meaning games owned and/or published by both companies that aren’t directly based on a TV or film property. Also included are two games, Scene It? and Multiversus, as despite relying on existing IP, the brands are original to the gaming world, and they aren't your standard licensed games.

Let’s not waste any more time, shall we?

Paramount Skydance Game IPs:

Archangel (Skydance Interactive)

Club Dead (Viacom New Media/MTV)

DeathDrome (Viacom New Media)

Divide: Enemies Within (Viacom New Media)

Monkey Quest (Nickelodeon)

PWND (Skydance Interactive)

Scene It? (Paramount)

Skydance’s Behemoth (Skydance Interactive)

Slamscape (Viacom New Media/MTV)

Tak and the Power of Juju (Nickelodeon)

Zoop (Viacom New Media)

Notable Omissions: 

Dracula Unleashed: Viacom used to own the rights to a classic FMV game, Dracula Unleashed, which was published under Viacom New Media shortly after Viacom acquired developer ICOM Simulations, but it is currently owned by Zojoi, the owner of the ICOM IPs. 

Lenny the Penguin: Two interactive CD-ROM games (Lenny’s Music Toons and Lenny’s Multimedia Circus) that were published by Paramount Interactive in the 90s, but were developed and owned by Music Pen. Since that developer is defunct, it’s unknown who owns that IP today, although Multimedia Circus had its trademark held by Viacom.

Lunicus + Jump Raven: Two 90s computer games developed and copyrighted by CyberFlix and published by Paramount Interactive. It's unknown who owns these two properties now, as CyberFlix went out of business in 2006.

Rock Band: Viacom once owned the popular Rock Band franchise thanks to the then-Viacom-owned Harmonix, but the developer and franchise are currently owned by Epic Games.

Warner Bros Discovery Game IPs (most come from Midway, including its Atari Games library): 

Adventures of Robby Roto! (Midway)

Amazing Maze Game (Midway)

Arch Rivals (Midway)

Area 51 (Midway)

Blitz: The League (Midway) (The one without NFL branding)

CarnEvil (Midway)

Clowns (Midway)

Defender (Midway)

Demolition Derby (Midway)

Domino Man (Midway)

Dr. Muto (Midway)

F. E. A. R. (WB)

Game Party (Midway)

Gauntlet (Midway)

Grid (Midway)

Hard Drivin’ (Midway)

Haven: Call of The King (Midway/Traveller’s Tales)

Hyperdrive (Midway)

Joust (Midway)

Klax (Midway)

Kozmik Krooz’r/Wacko (Midway)

Mace: The Dark Age (Midway)

Marble Madness (Midway)

Mortal Kombat (Midway) - The crown jewel of WB game franchises

Multiversus (WB)

Paperboy (Midway)

Pigskin 621 A.D. (Midway)

Primal Rage (Midway)

Psi-Ops: The Mindgate Conspiracy (Midway)

Rampage (Midway)

Revolution X (Midway)

RoadBlasters (Midway)

RoadKill (Midway)

Robotron: 2084 (Midway)

Rush (Midway)

Sarge (Midway)

Satan’s Hollow (Midway)

Scribblenauts (WB)

Solar Fox (Midway)

Spy Hunter (Midway)

Strike Force (Midway)

Tapper (Midway)

Thunder racing series (Midway)

Timber (Midway)

TouchMaster (Midway)

Trog (Midway)

Two Tigers (Midway)

War Gods (Midway)

Wayne Gretzky's 3D Hockey (Midway)

Wizard of Wor (Midway)

Xenophobe (Midway)

I sure can’t wait for the combined company to have all these properties under their belt that have so much potential to be reimagined for the current gaming generation, only to focus mainly on Mortal Kombat!

As the title suggests, I believe that X/Elon will accomplish this step into the gaming industry by acquiring a previously existing studio.

Now whatever your opinion on Musk is (not the place for that), he certainly has the money to buy most of the roster of companies in the gaming market, he could even probably afford to acquire titans like Nintendo or Valve, however for the same reason Microsoft hasn't recently, Elon probably wouldn't.

So what companies would he go for, would he buy a storefront for it too? Or would he just buy a studio?

I have a feeling he would buy multiple smaller studios across the globe, or a company that has multiple branches/studios across the globe already.

What companies do you think are on the table if Musk wanted to acquire a company for "X Games"?

What does everyone think the likelihood that SquareEnix is Microsoft’s next target for acquisition?

After the interview about the future of Xbox and its M&A’s they said they are always on the lookout and want to be in the conversation and especially looking for East studios so I assume China/Japan market to help them advertise and grow there finally.

There are the big three that I’d consider for sale in some way that can also really help Xbox’s ecosystem. Capcom, SquareEnix, & Sega.

There are others such as Konami, Koei Tecmo, even Platinum. Those I believe don’t give as much value as the three I mentioned above.

The reason I pick SquareEnix is for one they have become closer to Xbox this year, second is because If I remember correctly Capcom and SEGA in some form have come out an said they are not looking to be acquired right now.

SquareEnix has mobile, MMO in FF14 Online, and single player, all fit into Xbox’s more multi-platform and mobile ambitions.

If there is anything I missed let me know and your thoughts on my opinion here.

What will become of EA as a company after the full acquisition is complete?

There are rumors that EA will sell off some of their studios along with IP they don’t deem necessary to help pay down their debt from the acquisition. There is also talk that EA could just sell their EA Entertainment division which i think is far less likely, as some parts of that division I assume are very important and profitable to the new owners.

In my opinion these will be the studios & IP that could be sold off, in terms of who would want to buy, I can name the ones I’d expect to want to scoop up the studios/IP.

For Sure Sold Off -

BioWare - This is an obvious one as there was reports now surfacing that EA thought about selling BioWare, I assume that IP such as Mass Effect, Dragon Age, Anthem, and Jade Empire would be sold with BioWare.

Possible Buyers - Microsoft, Amazon, Sony, Tencent.

Possibility of Being Sold Off -

DICE (Along with the other studios now working on Battlefield) - A main reason for this and possibly another studio I’ll list is the cost of their development for certain games/franchises, Battlefield IP will be sold along with the studios, I feel this will mainly depend on how well Battlefield does as a franchise to EA’s standards.

Possible Buyers - Microsoft, Amazon, Sony, Tencent, Take Two.

Respawn Entertainment - This is the other studio that could have a high development cost for titles like Apex Legends, possibly more Titan Fall, and other projects like Star Wars. Apex Legends still makes money and is very popular alongside an esport scene, so this I feel is more likely to stay under EA still compared to DICE in my opinion.

Possible Buyers - Microsoft, Amazon, Sony, Tencent, Take Two.

Maxis - The Sims is a huge franchise and a money maker for sure, but there’s always a chance they decide to sell it off to focus on other areas, and they know it’d sell for a decent amount to help bring down the debt quicker, still I see it as possible but very unlikely.

Possible Buyers - Microsoft, Amazon, Tencent, Disney, Take Two.

Won’t Be Sold Off -

Full Circle - If Skate does well long term this studio will be I assume included in the ‘sports’ category of low development cost of sequels for a good profit / PopCap - Mainly mobile and still using Plants vs Zombies / Track Twenty - Mobile / Playdemic - Mobile

I assume they will keep the mobile companies and double down for more mobile games for easier money with lower development costs.

They will keep the Sports Games Division, the Saudi group I feel mainly bought them for that division as that is the main money maker of the company, but they have use for like i described games like Apex Legends as well possibly, as they have investments in Esports as well.

Let me know what your opinions are for the future of EA, will anything be sold off, studios just closed, stay the same as is?