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Xbox CEO Scraps Copilot AI for Consoles to Refocus the Platform on Gameplay-First Experiences

  • On Tuesday, Microsoft Xbox CEO Asha Sharma announced a leadership overhaul, appointing new executives from the CoreAI division to help return the gaming unit to growth.
  • Microsoft reported its fourth consecutive gaming revenue decline last week, with Xbox hardware sales falling 33% and overall gaming revenue dropping 7% in the quarter ending March 31, 2026.
  • Sharma is integrating four leaders from her former CoreAI team, including Jared Palmer and Tim Allen, to focus on "developer tooling, taste and infrastructure" for the platform.
  • Microsoft will wind down Gaming Copilot on mobile and stop development on consoles, retiring features that "don't align with where we're headed."
  • Sharma aims to "evolve how we work" to address player frustration, as the company seeks to improve the platform's developer experience and connection with the community.
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The brand is discontinuing development of its AI assistant for consoles and removing it from its mobile app. Following a wave of criticism regarding the integration of AI into the Windows operating system, Microsoft has begun reconsidering the presence of Copilot in its other products. New Xbox head Asha Sharma announced the closure of the Copilot gaming assistant project on consoles and the beginning of the phasing out of similar features in th…

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TweakTown broke the news on Tuesday, May 5, 2026.
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