Xbox co-founder believes “Xbox is being sunsetted” — as Microsoft pivots to AI
Seamus Blackley shares concerns about Microsoft’s AI direction, suggesting Xbox could be deprioritized as the company doubles down on generative AI across its business.
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In a recent interview with GamesBeat, Xbox co-founder Seamus Blackley reflected on where he believes Microsoft and Xbox are heading next.
Blackley helped co-create the original Xbox, convincing Microsoft to enter the console market in the early 2000s. Without that push, the Xbox brand as we know it may never have existed.
Now, decades later, he has shared his thoughts on how things are going at Microsoft, and more importantly, where he believes Xbox could be heading under its new leadership.
If his interpretation proves accurate, it would not be a direction many fans would welcome. That said, his comments are speculative. They reflect his perspective on Microsoft’s broader AI strategy, rather than confirmed plans for the Xbox division.
Still, given his role in getting Xbox off the ground in the first place, it is worth examining exactly what he had to say.
Why Blackley believes Xbox is being “sunsetted”
In the interview with GamesBeat, Blackley states:
From Microsoft. Satya Nadella has made an incredible number of bets and invested an incredible amount of money and credibility in the transform model AI future. Xbox, like a lot of businesses that aren’t the core AI business, is being sunsetted. They don’t say that, but that’s what’s happening. I expect that the new CEO, Asha Sharma, her job is going to be as a palliative care doctor who slides Xbox gently into the night.
Seamus Blackley
It is a sharp comment, and importantly, one rooted in his own interpretation of Microsoft’s broader AI strategy.
Internally, people at Xbox remain cautious, worried Sharma will push AI more, according to The Verge. While Sharma’s background is in AI, her work has largely focused on machine learning, but she helped grow GitHub Copilot.
Blackley’s concern appears to center on Microsoft’s wider push into AI across the company. When asked about Sharma’s comments that Microsoft does not want to create “AI slop,” he responded:
Some people coming from outside businesses succeed in games, and others just hit the wall, because it’s a content business and they don’t expect that. They’re not ready for that. They think it’s a compute business, or they think it’s a rendering business, or they think it’s a software business. Games is none of those things. It’s hilarious, but it’s none of those things. Her statement, or the statement that was written for her in the press release, saying that she was looking forward to seeing what makes games work or something like that, was hilarious. It reminded me of that meme. ‘Hello, fellow kids!’ I’ll now figure out what’s interesting about games! Oh, boy. Wow. There may be more than you think. People have succeeded at that before. Maybe she will.
Seamus Blackley
Again, these are strong remarks from one of Xbox’s founders. Whether his prediction proves accurate remains to be seen and you can read the full interview, linked here.
For now, I am cautiously optimistic. A shift in leadership could be the reset Xbox needs, even as many of us, myself included, appreciate what Phil Spencer did for the brand.
Do you think Microsoft's AI focus will ultimately be the death of Xbox?
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Adam is a Psychology Master’s graduate passionate about gaming, community building, and digital engagement. A lifelong Xbox fan since 2001, he started with Halo: Combat Evolved and remains an avid achievement hunter. Over the years, he has engaged with several Discord communities, helping them get established and grow. Gaming has always been more than a hobby for Adam—it’s where he’s met many friends, taken on new challenges, and connected with communities that share his passion.
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