Microsoft weighs options for Xbox as restructuring talk grows
The Information says Microsoft has considered making Xbox a subsidiary, joint venture or separate company while it reviews costs and hardware plans.
By James Whitfield · Staff Writer
2 min read
Microsoft has considered major changes to how it owns and runs Xbox, including a possible separation of the gaming business, according to The Information. The talks matter because they come as The Verge reports Microsoft is preparing layoffs in the Xbox division and reviewing plans for its next console.
The Information reported that Microsoft has looked at several options meant to make Xbox more sustainable. Those options include moving Xbox into a wholly owned subsidiary, creating a joint venture or spinning it off, with a sale also among the possibilities described in the report.
The report did not say a transaction is near. The Verge reported that Xbox CEO Asha Sharma and Microsoft CEO Satya Nadella have not taken such options off the table as they consider the future of the unit.
Xbox faces cost pressure
The Verge reported that Microsoft is preparing to cut a significant portion of Xbox staff. The company is also reevaluating Project Helix, its next-generation console plan, according to The Verge.
The Information framed the ownership discussions as part of a broader push to make the Xbox business more durable. Microsoft has not announced a spin-off, subsidiary structure or joint venture based on the reporting described by The Information and The Verge.
The review follows a period in which Xbox has been reassessing its bets across hardware, software and studios, according to The Verge. The reporting points to a division under pressure to improve its economics while still funding major game franchises.
Big franchises stay in focus
Sharma has received approval to spend heavily on major Xbox properties including Halo and Fallout, The Information reported. The Verge noted that Halo has not had a new release since 2021, while the last mainline Fallout game, Fallout 4, arrived in 2015.
Sharma has also said that Gears of War: E-Day and Clockwork Revolution will be Xbox exclusives, according to The Verge. Those releases are among the higher-profile games in Microsoft’s pipeline as the company weighs where to concentrate resources.
The Verge reported that the renewed focus on Xbox’s best-known series could come at the expense of smaller studios and titles that have not met sales expectations. Windows Central has reported on pressure inside Xbox tied to margins and game performance.
For now, the reported discussions leave Xbox’s structure unsettled rather than changed. The Information’s account shows Microsoft has examined options beyond internal cost cuts, while The Verge’s reporting shows the company is also looking at staffing, hardware plans and which games receive investment.
This story draws on original reporting from The Verge.