If Microsoft sold off Xbox, who would even buy it?
Microsoft announced sweeping restructuring of its Xbox division, laying off 1,600 employees immediately with an additional 1,600 positions to be cut over the next fiscal year. The company is also shutting down four development studios as part of the overhaul.
Xbox CEO Asha Sharma justified the drastic measures in an internal memo, stating that the business is “not healthy.” Speaking to Fortune, she explained that Microsoft had “simply spread ourselves too thin,” indicating the division has struggled with unfocused strategy and strategic overextension across too many projects and initiatives.
The announcement raises significant questions about Xbox’s future direction. With the company refocusing on developing only major titles and implementing massive workforce reductions, the platform’s long-term positioning remains uncertain. Industry observers have begun speculating whether Microsoft might consider divesting the Xbox business entirely or selling it in separate parts. However, finding buyers willing to acquire the entire Xbox platform may prove challenging, with any transaction more likely to involve selling the business in pieces rather than as a whole.
These cuts represent one of the gaming industry’s most significant recent restructurings, underscoring mounting pressure on major gaming publishers to streamline operations and improve profitability amid changing market conditions.