Xbox CEO Want to Explore New Business Models and Innovations to Keep Project Helix Affordable

Xbox CEO Asha Sharma continues to discuss what’s next for Xbox after announcing a couple of days ago that she wanted to “reset the business” over the next 100 days. Yesterday, the new head of Xbox gave another interesting interview at the Fortune Brainstorm Tech conference in Aspen, Colorado, where she addressed the impact of rising memory and storage prices on current and future Xbox hardware.

Sharma bluntly admitted that “we are in a crisis right now,” with the shortages of memory and storage causing costs to increase exponentially. “There’s more demand than there is supply for our Gen 9 consoles, and I suspect the same will be there with our Gen 10 console,” the exec also said.

Obviously, the AI-fueled price increases aren’t going to stop any time soon, and this is forcing the Xbox team to rethink how it’s going to manufacture and sell consoles going forward. “We must think about other ways to think about the cost construction of the console, we must think about how we create different plans, so more people can participate in the console. We must think about partnerships that will allow us to have better distribution and reach, and we must think about the experiences that we’re creating outside of that as well to reach new audiences,” Sharma said yesterday.

Regarding Project Helix, which former Xbox President Sarah Bond previously described as “a very premium and high-end curated experience,” it looks like Sharma may be ready to shake things up as well. After Xbox Series X|S consoles sold worse than Xbox One consoles at the same point in their lifetime, it’s already hard to see how Project Helix could do better if it’s even more expensive than the $600 Xbox Series X.

“We will, you know, continue to look at new business models,” Sharma said. “I think we’ve reached a point where it will be hard to imagine that mass audiences can afford thousands of dollars to spend on a console generation, and so I think we will start to see radically different business models that we never expected start to come into orbit later this year.”

Regarding Project Helix more specifically, Sharma reiterated that it will be able to play PC games and offer backwards compatibility with Xbox console games. However, she added that “there’s material work to do to make sure that it is available to the people that want to play, and so we’re working on that.”

“I think that we have to think very differently about storage and memory going forward,” Sharma continued. “We will have to apply new techniques, so that we can compress that. We will have to empower customers to have very flexible storage offerings. We will have to empower new types of games, so they can fit on device, and so there’s going to be a lot of innovation. This will take years, not days, not weeks, but we’ll go through it together with the community.”

The point about “very flexible storage” offerings suggests that Microsoft may abandon the proprietary storage expansion cards that were introduced on the Xbox Series X|S generation. Sony made a different choice on the PlayStation 5, with an internal SSD bay allowing gamers to extend their storage by putting standard (and cheaper) NVMe SSDs inside their consoles. Microsoft’s solution is more convenient thanks to the plug-and-play aspect of these cards, but only Seagate and Western Digital currently manufacture them, and they’re still not cheap.

Sharma also briefly touched other topics during the interview, including game exclusivity and Game Pass growth. Regarding Xbox-exclusive games, the Xbox CEO said, “our business isn’t particularly healthy, so we’re starting by introducing one to two signature exclusives, and as the business is healthy, we will look to try and do more.”

Lastly, Sharma said that following the recent price drops for Xbox Game Pass Ultimate and PC Game Pass reversed the “decay in subscribers” caused by the previous 50% price increase for the Ultimate tier. “We’re starting to see a return to growth, we’re starting to see more subscribers, we’re starting to see, more importantly, better retention.”

The Xbox CEO also hinted that new Game Pass tiers may be coming soon to accelerate that renewed growth. “We’ve got more work to do, so we’ll be doing more this summer in order to create more flexible offerings to meet all the types of players that we have, and we’ll continue to iterate on that,” Sharma said.