Shawn Layden, the former PlayStation boss whose career spanned the console wars of the late 1990s, has a blunt message for Xbox: pick a lane with exclusive games, or risk repeating Sega’s Dreamcast mistake. Speaking to The Expansion Pass podcast, Layden argued that a platform needs exclusives to matter, and he compared Xbox’s current position to the moment Sega launched the Dreamcast and failed to hold onto it.
Layden’s full line was direct: “A platform needs exclusives or else the platform has no meaning.” He added that most of Xbox’s current woes come from the company’s inability to commit to exclusives, and he offered a warning: “Or if they picked a lane, they didn’t stay in it very long.”
Layden’s Warning
The comparison to the Dreamcast is telling. Layden is not suggesting Xbox will vanish entirely. He is saying that a platform without a distinct identity risks becoming invisible. The difference between the two companies is stark: Sega was a hardware maker that lost its footing; Xbox is a software powerhouse that has shifted its strategy on exclusives.
He also acknowledged that current Xbox CEO Asha Sharma seems to be trying to “right the ship” in recent months. Layden added, “I hope she does it, though I don’t know what that looks like.” That caveat matters. Layden is not predicting success; he is offering advice.
The Case for Exclusives
The core of Layden’s argument is simple. A platform is not a store, it is a destination. Players buy a console for a reason, and that reason is usually a game or a set of games that exist nowhere else. Sony learned this lesson with the PlayStation 2, and Microsoft has spent years trying to replicate it.
Xbox has tried to follow that model. The studio has published original games, but the pattern has been inconsistent. Some games are exclusive, others are not, and the confusion has hurt the platform’s reputation.
Sharma’s Record So Far
Sharma took over at the start of the year, and her first move was a corporate restructure that resulted in 3,200 lost jobs. Sharma has also made acquisitions. She signed Hideo Kojima’s Physint and bought back some console exclusives with Gears of War: E-Day and Clockwork Revolution. These moves suggest a commitment to building a stronger portfolio of exclusive content. Whether that commitment holds is another question.
Sharma recently shot down speculation about Microsoft selling Xbox, saying she wants to course correct “whatever it takes.” That statement is notable because it addresses the elephant in the room: the possibility that the division could be sold off. By rejecting that idea, Sharma is signaling that she believes in the platform’s future.
The Numbers Behind the Decline
The evidence of Xbox’s decline is not theoretical. Xbox Series X/S console sales have continued to drop this generation. Microsoft has released almost all of its games exclusively on PC and Xbox consoles before flipping to become a sort-of third-party publisher under Phil Spencer’s tenure. The shift was strategic, but the result has been visible for years.
Starfield and Halo: Campaign Evolved are examples of the problem. Both games appeared on PS5 alongside PC and Xbox consoles, which dilutes the value of owning an Xbox. The trend has not helped the platform’s sales.
The decline is not new. Xbox has responded with a series of moves, including the layoffs and the acquisitions, but the trajectory has not changed.
What Xbox Needs to Do
Layden’s advice is straightforward: pick a lane and stay in it. That means committing to a strategy of exclusives, even if it means sacrificing some of the publisher-scale advantages that Microsoft has built up over the years. It is a choice between being a platform and being a publisher, and the two roles are increasingly difficult to reconcile.
The Dreamcast comparison is apt. Sega launched a great console and could not sustain it. Xbox has launched several great consoles, but it has not sustained a consistent identity. The difference is that Xbox has more resources than Sega ever had. The question is whether it has the will.
Sharma has shown willingness to make hard cuts. Whether she can deliver the exclusives Layden demands is unknown. The path forward is clear, but the execution is the hard part.
The Road Ahead
Xbox has a few things working in its favor. The next-gen Project Helix is still going ahead, which suggests a long-term commitment to the platform. Sharma has also signaled that she wants to course-correct.
The challenge is that the course-correction has to address the fundamental problem: Xbox is not a distinct destination. It is a collection of games, some of which are exclusive and some of which are not. That ambiguity hurts the brand.
Layden’s advice is sound, but it is not easy to follow. Building a portfolio of exclusives requires investment, patience, and a willingness to say no to deals that would otherwise make sense. Xbox has not shown that discipline consistently.
The comparison to the Dreamcast is not a prediction of failure. It is a warning about identity. A platform without a clear reason to exist is a platform that will fade. Xbox has survived this long, but survival is not the same as success.
The key facts from this story:
- Xbox Series X/S console sales have continued to decline this generation.
- Microsoft has released almost all of its games exclusively on PC and Xbox consoles before becoming a sort-of third-party publisher under Phil Spencer’s tenure.
- Xbox CEO Asha Sharma took over at the start of the year and has kicked off a corporate restructure resulting in 3,200 lost jobs.
- Sharma signed Hideo Kojima’s Physint and bought back some console exclusives with Gears of War: E-Day and Clockwork Revolution.
- Starfield and Halo: Campaign Evolved appeared on PS5 alongside PC and Xbox consoles.
The path forward is clear, but the execution is the hard part. Xbox has the resources, the talent, and the ambition. Whether it has the discipline remains to be seen.
Where the paper stands
The paper backs a light touch on AI and technology so startups are not frozen out, and is against broad licensing regimes and compliance costs that only giants like Xbox can afford. Here the stakes are not about AI regulation but about platform identity, and the principle holds: when the biggest firm asks to be regulated, the paper asks who those rules would lock out.
The Dreamcast comparison is a warning about identity, not a prediction of failure. Xbox has more resources than Sega ever had, and it has not sustained a consistent identity. The decline is real, the layoffs are real, and the sales numbers are real. But the cause is not the hardware business itself; it is the refusal to commit to exclusives.
What the paper would want instead is a platform that picks a lane and stays in it, even if that means sacrificing some of the publisher-scale advantages that Microsoft has built up. The discipline has not been shown consistently. The road ahead is clear, but the execution is the hard part.
See the video the story is built around at Eurogamer.
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