Xbox rightly bins lame AI Copilot concept in bid to win back fans

Xbox head Asha Sharma has shelved Microsoft’s plan to make Copilot AI a key part of the Xbox experience for players.

In case you missed this one, Microsoft had previously announced a plan to make Copilot a chatbot-style gaming companion for console players — one of those big AI swings that made some sceptics throw up in their mouths a little.

"Ask for in-game AI assistance, help, insights & recommendations anytime you're playing with Xbox," was Microsoft's sell-in for the feature, which reached beta stage on PC.

“We will begin winding down Copilot on mobile and will stop development of Copilot on console,” Sharma posted on X, which she says is part of the new direction for Xbox under her leadership.

“As part of this shift, you’ll see us begin to retire features that don’t align with where we’re headed.”

Sharma took over the leadership of Xbox, as CEO, swiftly after an announcement of a shake-up at Xbox in February 2026. She took over from Phil Spencer, who has worked at Microsoft for 38 years, and who now works in a quiet — more or less silent, from the public’s perspective — advisory role.

This is the latest in a series of fairly dramatic changes in Xbox policy and strategy. These include making Xbox Game Pass much cheaper, the Ultimate tier dropping from £22.99 to £16.99 in April while losing day-one Call of Duty releases in exchange, and reaffirming the importance of future Xbox hardware.

It’s an attempt to undo some of the loss of goodwill the Xbox brand has suffered.

“Xbox needs to move faster, deepen our connection with the community, and address friction for both players and developers,” says Sharma.

For those who haven’t yet been briefed on how bad the situation is, Xbox Series consoles are estimated to have sold somewhere in the ballpark of 35 million units to date. The PlayStation 5 has sold upwards of 92 million consoles.

And, even worse, Xbox hardware revenue in Q3 2025 dropped 33 per cent year-on-year, indicative of the console series’s dire lack of momentum.

CNBC reports there have recently been widespread role changes within the higher-ups at Xbox. These indicate that while Copilot may be having its oar forcibly removed from Xbox consoles, AI is still seen as critical to the business.

Former head of ChatGPT growth at OpenAI, Jonathan McKay, will lead the Xbox growth strategy, while Shama has also brought over a bunch of other execs from her previous job in Microsoft’s CoreAI division.

In an interview with Variety following her rise to Xbox CEO in February, Sharma said she has “no tolerance for bad AI.” But exactly what good AI looks like in the context of someone using an Xbox console in their living room remains anyone’s guess.