After year after year of expensive bombs, falling relevance, and brutal layoffs, one might think Microsoft is ready to cut its losses on gaming. But that might be a far cry from the truth. XBOX CEO Asha Sharma has flatly denied that the gaming division is for sale, following a report that Microsoft executives had considered spinning it off. Still, her answer barely reassures fans as XBOX still searches for the ‘right operating model’ to stay afloat.
“Xbox is not for sale,” Sharma told The New York Times when asked if Microsoft might eventually sell off its gaming business. “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.”
It’s not hard to see why the topic came up. Recent layoffs saw another 268 XBOX employees losing their jobs in the company’s ongoing ‘reset.’ The latest restructuring also saw several studios consolidated under bigger names, with Activision now heading the next Halo game. That’s on top of around 4,800 layoffs Microsoft announced throughout Fiscal Year 2027, with most coming from gaming.
Considering all that, gossip over whether Microsoft might eventually cut XBOX loose isn’t exactly surprising. In fact, that possibility apparently was already on the table.
Back in June, The Information reported (paywalled) that Microsoft CEO Satya Nadella and CFO Amy Hood had discussed several options for XBOX. Its sources claimed that those allegedly included turning it into a ‘wholly owned subsidiary,’ forming a joint venture, or ‘spinning it out’ of Microsoft entirely.
Whatever discussions were happening behind closed doors, though, it seems XBOX eventually got its much-needed second wind. The Information later reported that Nadella and Hood had backed Sharma’s plan to spend top dollars on ‘top-tier games,’ as shown by its acquisition of Hideo Kojima’s Physint.
Nadella also said on the recent Sources podcast that Sharma’s ‘streamlining’ was ‘great to see’ and that Microsoft needed to create a sustainable gaming business model. “I think Asha and team have said that XBOX is going to get back to growth this next fiscal year, and that’s the plan they’re executing on,” added Nadella.
For Sharma, too, all that restructuring isn’t supposed to end with XBOX leaving Microsoft. She pointed to its 500 million monthly players and stressed that the two still have a future together. “We’ve got a long way to go with Microsoft,” Sharma said, “And we’re going to take the long-term view.”
