Microsoft CEO Satya Nadella has declared gaming a permanent fixture in the company's future, telling Xbox staff that Microsoft will "always" invest in the division despite recent struggles. The commitment came during an internal Q&A session with new Xbox CEO Asha Sharma earlier this week, where Nadella positioned gaming alongside Windows and cloud services as one of Microsoft's core identities.
"We're long on gaming," Nadella said during the session, which was verified by multiple sources. "We'll continue to invest, and we'll always do so."
The CEO described gaming as more than just a consumer product, noting its historical role in driving technological advances like DirectX and GPU acceleration across the industry.
Nadella's strong endorsement arrived alongside Microsoft shooting down viral rumors that he had given Sharma unlimited resources to revive Xbox. Chief Communications Officer Frank Shaw explicitly denied claims circulating online that Nadella had offered Sharma a "blank check" for Project Helix, the codename for Microsoft's next-generation console.
The clarification came after speculation emerged from an internal town hall between Nadella and Sharma.
Project Helix represents Microsoft's attempt to unify PC and console gaming in a single system for the first time. Announced last week by Sharma, the hybrid hardware aims to play both Xbox console games and full PC titles from Windows' open marketplace.
Technical details remain sparse beyond promises of leading performance and compatibility with existing game libraries.
During the Q&A, Nadella emphasized gaming's emotional connection with users compared to enterprise software, calling it one of four main identities that define Microsoft alongside platform development, software creation, and knowledge worker tools.
"I don't think Microsoft will exist without these identities continuing to thrive," he told employees.
Sharma acknowledged Xbox has been in a transition phase with "everything being relitigated" regarding strategy. She stressed that great games cannot be "manufactured" but must be "crafted" by human developers, pushing back against concerns about AI-driven game development overshadowing traditional creative processes.
The new Xbox CEO also revealed that over 10% of Xbox team members have been with Microsoft for more than twenty years, highlighting institutional knowledge within the division despite recent leadership changes following Phil Spencer's retirement.
Nadella addressed Xbox's existing customer base directly, stating: "We have to make sure that the friends we have today are the friends that you have tomorrow." He positioned gaming as an antidote to passive content consumption, describing it as "active engagement" that brings joy in contrast to what he called "the level of hijacking of our attention that's going on."
Project Helix faces challenges in a market where Xbox hardware has struggled against competitors. The system is positioned as a high-performance niche product rather than mass-market hardware, aiming for closer integration between PC and console ecosystems while maintaining support for existing franchises like Halo and Forza.
Sharma plans to discuss Project Helix further with partners and studios at her first Game Developers Conference next week.
