Ex-PlayStation Boss to Xbox: 'Pick a Lane'

Former PlayStation boss Shawn Layden advises Xbox to either compete as a platform or become the world's biggest publisher. He calls it a 'Dreamcast moment' for Microsoft.

What would you do if you were running Xbox? The company's been through massive changes under new CEO Asha Sharma—layoffs, studio partings, and consolidating teams under Activision, Blizzard, King, and Bethesda. All to make Xbox a profitable piece of Microsoft's empire. But former PlayStation boss Shawn Layden has some blunt advice: "Pick a lane."

Speaking on The Expansion Pass, Layden was asked what he'd tell Sharma. His answer? Xbox needs to decide if it's a platform or a publisher—not both. "Either you're going to be a platform competitive with PlayStation—which Xbox has not been competitive with PlayStation for years—but that's not out of the window," Layden said. He noted that would require tough calls on exclusivity and incentivizing third parties.

Or, as Layden put it, Xbox could "sit back and realize you are the biggest game publisher in the world—maybe Tencent's bigger—but in the Western world you are the biggest game publisher out there with Activision, Blizzard, Bethesda, and all the other pieces." That path means focusing purely on software.

Layden even called it Xbox's "Dreamcast moment," referencing Sega's decision to exit hardware and become a software-only company. "It can be done. It has been done before," he said. "That's my advice. Pick a lane."

Why does this matter? Xbox has been notoriously secretive about console sales, but it's believed to trail far behind PlayStation 5—which has sold 95.3 million units as of June 2026. Analysts predict only 2.5 million Xbox Series X|S units will sell in 2026, as Microsoft prepares for a "rapid wind-down toward zero" before its next-gen console launch.

Going software-only might actually work. Several Xbox first-party games have done great numbers on PC and PS5. If Xbox streamlines to focus on hit franchises like Fallout and Forza Horizon, there's clearly an audience. But there's a catch: releasing on PlayStation and Steam means giving up a cut of revenue, whereas Xbox keeps 100% of first-party sales through its own stores. Microsoft also charges third-party devs fees, so the math isn't simple.

So, what's your take? Should Xbox double down on hardware or go full publisher? Will you be picking up their next console, or are you happy playing their games elsewhere? Let us know in the comments!