Microsoft’s big Xbox reset looks a lot like what a company might do if it wanted to exit the gaming business or spin off the division into a standalone entity. Amid concerns that mass layoffs and restructuring are a prelude to shopping Xbox around, CEO Asha Sharma remains adamant that’s not the plan.
“Xbox is not for sale,” Sharma told The New York Times in a new profile. “We will do whatever it takes to set the company up for success, and we will look at the right partnerships, the right operating model and everything needed to achieve that.”
The answer, which the interviewer called a “bob and weave,” comes as many analysts are predicting an eventual divestiture of Xbox. The gaming division has always been an awkward fit for Microsoft, whose other businesses, including cloud computing and AI, still dwarf it despite the massive $70 billion acquisition of Activision Blizzard in 2023. As hardware sales have struggled and a big bet on Game Pass failed to materialize, the case for bailing has only grown stronger.
Earlier this year, The Information reported existing discussions within Microsoft around the idea of spinning Xbox off. That could take the form of an outright sale to a separate entity, or it could just consist of Xbox being turned into a standalone subsidiary or joint venture with another company. The reason to do that would be to strip the expensive, high-risk, hit-driven gaming business off of the rest of the company’s books and bolster Microsoft’s financials in the process.
But while killing or selling a number of smaller studios, and shifting others under internal publishing arms like Activision and Bethesda, might seem like the prelude to a potential spin-off, Microsoft’s recent bets can also be viewed as longer-term investments. Gutting Halo Studios and essentially starting over from scratch is a major strategy pivot that might not pay off for five years. The same goes for trying to ramp up quicker sequels to other big franchises like Fallout and Diablo, a new entry for which was announced for 2029.
“We’ve got a long way to go with Microsoft,” Sharma told The New York Times, “and we’re going to take the long-term view.”
