Analyst says Xbox sale could be an option after Microsoft cuts
Microsoft is cutting thousands of Xbox jobs and four studios, raising questions about whether the company could eventually sell all or part of the business.
By James Whitfield · Staff Writer
2 min read
Microsoft’s Xbox division is undergoing a sharp retrenchment, with thousands of job cuts and four studios set to leave the company. The moves matter because they have renewed questions about how gaming fits inside a Microsoft that is putting much of its attention and spending toward AI and infrastructure.
Microsoft announced this week that it would cut 1,600 Xbox jobs immediately and another 1,600 during the next fiscal year, according to The Verge. The company also said it would shed four studios as part of the changes.
Xbox CEO Asha Sharma described the business as “not healthy” in a memo published by Microsoft’s Xbox news site. In an interview with Fortune, Sharma said the company “simply spread ourselves too thin,” pointing to a business that had expanded beyond what management now believes it can support.
The cuts arrive as Microsoft’s public plan for Xbox remains difficult to read. The Verge has reported that Xbox is emphasizing large games, but the broader direction of the platform remains unclear after the restructuring.
Sale talk grows after the restructuring
No Xbox sale has been announced. Joost van Dreunen, a New York University professor, told The Verge that a full divestiture of Xbox remains possible and appears more plausible because of the unit’s problems with higher hardware costs and Microsoft’s heavier focus on AI and infrastructure.
Van Dreunen also told The Verge that Xbox’s place in Microsoft’s broader business system has not been clear. Still, he said a complete sale of the Xbox business is the less likely route.
That leaves open a narrower possibility: Microsoft could sell pieces of the gaming operation rather than seek a buyer for the whole Xbox brand. The Verge reported that there may not be many companies able or willing to buy the entire business, given its scale and uncertain strategic position.
A sale in parts could involve different assets attracting different buyers, though no such process has been confirmed. The current facts point only to a broad reset: job reductions, studio changes and a public acknowledgment from Xbox leadership that the business is under strain.
For Microsoft, the question is whether Xbox remains central enough to keep funding at its current scope. For the games industry, the answer could shape the future of one of its biggest platform owners, even if a full break from Microsoft remains only a possibility raised by outside analysis.
This story draws on original reporting from The Verge.