Xbox CEO Asha Sharma insists Microsoft’s gaming business is ‘not for sale’

Xbox CEO Asha Sharma said in an interview with The New York Times, reported Tuesday, that Microsoft has no plans to sell its gaming business. "Xbox is not for sale," Sharma said. She added that Microsoft would "do whatever it takes to set the company up for success" by considering the right partnerships and operating model.

The denial follows a wave of cuts and studio reshuffling that some read as preparation for a sale or spinoff. The Verge and Eurogamer reported that Microsoft plans to cut as many as 3,200 Xbox jobs by the close of its 2027 fiscal year in June. Destructoid reported a larger total of around 6,400 layoffs expected across the business over the course of a year.

The cuts have already hit hard: GamesRadar reported 1,600 workers lost their jobs in July, followed by roughly 250 more in September at Gears of War studio The Coalition and Age of Empires developer World's Edge. IGN reported nearly 2,000 Xbox staff have already been cut, with more coming this financial year. Halo has moved under Call of Duty publisher Activision, alongside the teams behind Rare, World's Edge and Age of Empires, per The Verge and Eurogamer, while Obsidian Entertainment was folded into Bethesda Game Studios, according to Insider Gaming and Eurogamer.

Eurogamer reported that three studios — Double Fine, Compulsion Games and Undead Labs — have gone independent, while the futures of Ninja Theory and Arkane remain unclear. That leaves only a handful of developers under Xbox Game Studios, including The Coalition, Playground Games, Mojang, InXile Entertainment and a reduced Halo Studios, Eurogamer reported.

Reports of a possible sale trace back to The Information, which The Verge reported had found in June that Nadella and Hood had considered spinning out Xbox entirely. The Verge reported that The Information later said this month that both executives have "more recently supported Sharma's plans to overhaul the unit" instead. Nadella addressed the changes on the Sources podcast, saying, "There's some amount of streamlining the team is doing, and Asha is doing, which is great to see," and adding that Microsoft must "invent the right sustainable business model that allows us to deliver gaming to more and more people." Financial pressures

Sharma laid out the financial reasoning behind the restructuring in a July blog post cited by IGN: "We are operating at margins that are 3-10x lower than comparable platform and publishing businesses." She wrote that Xbox entered the current console generation "with a smaller install base and a higher cost structure" and bet on Game Pass and multiplatform releases that "did not grow at the pace we expected," adding, "We must reset Xbox." IGN also reported that, excluding Activision Blizzard King, Microsoft spent more than $20 billion over five years on what Sharma called its content, platform and hardware "subsidy," while annual revenue declined by nearly half a billion dollars over that span. Xbox ended its financial year with a 3% accountability margin, down year-over-year, IGN reported.

IGN reported that analysts are skeptical any single buyer would take on all of Xbox, given Microsoft's $69 billion purchase of Activision Blizzard, its large payroll, extensive studio network and hardware business, and suggested large companies might instead pick off individual pieces. The New York Times, as cited by IGN and Eurogamer, floated the possibility of an independent Xbox that partners with Microsoft while keeping costs off its balance sheet, though Sharma did not endorse that path. "We've got a long way to go with Microsoft," Sharma said, "and we're going to take the long-term view." She told the Times Xbox still draws 500 million players a month, as Microsoft pursues a goal of reaching 1 billion people a day, a figure IGN said has been mocked online.