Xbox CEO Asha Sharma has denied reports that Microsoft is considering selling off its Xbox business. Amid concerns that mass layoffs and restructuring are a prelude to shopping Xbox around, CEO Asha Sharma remains adamant that’s not the plan. In an interview with The New York Times, Sharma declared: Xbox is not for sale.
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.
Asha Sharma Addresses Divestment Speculation
The Information reported in June that Microsoft CEO Satya Nadella and CFO Amy Hood had been considering spinning out Xbox entirely, and then reported earlier this month that both execs have more recently supported Sharma’s plans to overhaul the unit.
It appears that Nadella and Hood have favored the giant Xbox “reset” as the plan for Microsoft’s gaming unit instead of making Xbox a joint venture or spinning out the gaming business entirely. Sharma announced her Xbox restructuring in June, calling it a reset for the division. Microsoft is planning to lay off up to 3,200 Xbox employees over the course of its 2027 financial year, which ends in June.
Nadella backed Sharma’s restructuring and layoffs in a recent appearance on the Sources podcast. There’s some amount of streamlining the team is doing, and Asha is doing, which is great to see,
said Nadella last week. And then we have to invent the right sustainable business model that allows us to deliver gaming to more people.
One of the big questions emerging from Sharma’s appointment as Xbox CEO earlier this year, and the subsequent layoffs and restructuring that have occurred in recent months, revolves around the long-term future of Microsoft’s gaming business. Details on a potential shakeup came from The Information (via Reuters), which said that Microsoft hadn’t ruled out turning the Xbox brand into a wholly-owned subsidiary. It said the move could result in Xbox being operated as a joint venture with other partners or even potentially sold.
Restructuring Studios and Targeting Long-Term Growth
Sharma’s Xbox reset has since become clearer. Nearly 2,000 Xbox staff have already been cut, with more to come this financial year. Multiple studios have either exited Xbox or face closure, and various games have been canceled. Xbox is now focused on fewer, bigger video game franchises. After Microsoft announced the Xbox Reset restructuring plan in July and cut 3,200 jobs across its gaming division, speculation grew that the company could be preparing to sell Xbox. However, Xbox CEO Asha Sharma has clarified that the major shakeup did not signal plans to spin out the gaming business.
We’ve got a long way to go with Microsoft, and we’re going to take the long-term view,
added Sharma. Now, when it comes to the operating model and long-term vision, one thing immediately comes to mind: Xbox Game Pass. However, Microsoft later said it had nothing to announce about Game Pass. The company didn’t deny the claim, instead just stating it had no update to share.
Speaking of the layoffs that sparked speculation about a potential Xbox sale, major shake-ups dominated Xbox news last week. Halo moving under Activision was the biggest story. Discussing TV shows and movies, Sharma says they will continue to work with Sony and that competition and collaboration can coexist.
I don’t think you sign up for roles like this for work-life balance,
she said. I think you signed up for them because you believe in the mission and you do what it takes.