Xbox CEO Asha Sharma has said that Microsoft does not plan to sell its beleaguered gaming division. The executive’s comments arrive in the wake of a major round of cuts at the company that brought layoffs, studio restructuring, and reported project cancellations. A report this year claimed that Microsoft, after years of investment, was looking to cut its losses and spin off Xbox. In a new interview, Sharma said that wasn’t part of her plans for the division.
“Xbox is not for sale,” she told The New York Times. “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.”
Sharma’s comments appeared in a new profile in the paper on Wednesday, covering the many challenges staring at Xbox and her plans to revive the company’s business.
Xbox Upheaval
Microsoft’s gaming division has gone through years of upheaval following the expensive acquisition of Activision Blizzard in 2023. In the three years since, Xbox has closed multiple studios, cancelled several projects, and laid off thousands of employees. The latest round of cuts, announced last month, saw a further 268 workers laid off and a widespread restructuring of Xbox’s studios.
Despite Xbox’s struggles, Sharma said that the company’s future belonged with Microsoft.
“We’ve got a long way to go with Microsoft, and we’re going to take the long-term view,” she said.
Microsoft CEO Satya Nadella has backed Sharma to turn things around at Xbox and return to growth by the end of fiscal year 2027. More recently, he praised Sharma’s “streamlining” efforts, saying it was “great to see”. But, earlier this year, Nadella stressed the need for Xbox to become a sustainable business.
Microsoft Considering Spinning Off Xbox
In June, The Information reported that Microsoft was considering all options for its faltering gaming division, including spinning it off or restructuring it as a wholly owned subsidiary. A potential plan to bring in other partners and reset Xbox as a joint venture was also reported to be among the company’s considerations.
The report arrived days after Sharma had outlined Xbox’s grim business reality and the need to reset the division across hardware, content, and services over the next 100 days. At the time, Sharma revealed that Xbox was running at a 3 percent “accountability margin”—Microsoft’s internal metric for profitability of its divisions. The Xbox boss also confirmed that the company’s revenue had declined nearly half a billion during the last five years.
In July, Sharma laid out the biggest restructuring plan in Xbox’s history and announced that the company would lay off 3,200 employees by the end of the fiscal year. In addition to job cuts, Xbox also parted ways with Compulsion Games, Double Fine, and Undead Labs—studios that now operate either independently or under a new ownership.
A similar solution for Hellblade developer Ninja Theory could not be found, and Xbox is now in consultation with the studio’s employees over a proposed closure, even as it continues to explore other options. Microsoft is also in consultation with French studio Arkane over possible strategic options, including a sale or a spin-off. The talks remain ongoing and are expected to continue through the end of the year, Xbox confirmed last month.
