Xbox CEO Asha Sharma told The New York Times that Xbox is not for sale, closing down months of speculation regarding a potential spin-off while Microsoft moves three-quarters through a major operational reset involving studio divestitures and organizational restructuring.
Speculation surrounding the future ownership of Microsoft’s gaming division gained momentum earlier this year following executive discussions and industry reports. Those rumors were addressed directly when Asha Sharma confirmed the brand’s immediate future during a New York Times profile published at the start of October 2026. Xbox is not for sale,
Sharma stated, adding that the company will pursue the right partnerships, the right operating model and everything needed to achieve that.
Before Sharma took charge of those transitions, Reuters reported that The Information shared in June that Microsoft executives Amy Hood and Satya Nadella contemplated spinning off or reorganizing Xbox as a completely owned subsidiary. Such a move could theoretically help facilitate a sale or allow Xbox to be run as a joint venture with other companies further down the line. A subsequent September follow-up confirmed that both Nadella and CFO Amy Hood had backed Sharma’s restructuring plan rather than any separation option. Analysts quoted in the profile noted that spin-off speculation has persisted for years and never materialized.
Corporate Restructuring and Studio Consolidations Under Asha Sharma
The denial of a sale arrives as Xbox completes roughly three-quarters of its sweeping corporate reset. According to internal figures cited by leadership, the division previously lost 64 cents for every dollar invested. In her July 31, 2026 post-restructuring memo, Sharma disclosed that Xbox added 200 million new players in fiscal year 2026 while revenue still declined. Sharma also noted that profit margins at Xbox were three to ten times lower than comparable platform and publishing businesses.
To curb these losses, Microsoft has enacted widespread layoffs and studio divestitures. Following massive layoffs earlier in the year that cut 1,600 jobs across many studios, a more recent round affected 268 roles across various studios. Double Fine Productions, Undead Labs, Compulsion Games, and Ninja Theory are the four studios the company has chosen to part ways with. Microsoft also entered discussions with French studio Arkane over possible strategic options, including a sale or a spin-off, with talks expected to continue through the end of the year.
Franchise Shifts and the Future of Halo Development
Studio reorganization has also impacted marquee intellectual properties. Responsibility for the next major installment has shifted, with Activision taking over the development of Halo, while Halo Studios keeps a small team to continue supporting older games. During an internal town hall meeting, leadership highlighted strong market receptions for Gears of War: E-Day, Minecraft Dungeons 2, and World of Warcraft Forever. Gears of War: E-Day earned critical praise upon its review embargo lift, securing an 87 on Metacritic. The campaign marks a return to the series’ roots.
Subscribers, Pricing Reversals, and Gen-10 Hardware Plans
Subscription services have experienced significant volatility over the past year. A Wall Street Journal report placed subscriber totals at roughly 30 million as of July 2026, well below the 34 million Microsoft officially confirmed in early 2024 and far short of internal projections tied to the Activision acquisition. Sharma noted that the previous Xbox Game Pass strategy sent Xbox into freefall declines on the balance sheet.
Leadership also hinted that Xbox Game Pass will get more flexible for more players in the future, allowing users to tailor exactly what types of content they want to access in the service.
Hardware strategy is similarly evolving toward the next generation. She noted that there is not one device that fits all, confirming that while Xbox will have a great console first, many players will be on the go, pointing to innovations like Xbox Cloud Gaming, the disc-to-digital program, and Xbox Play Anywhere growth as key to strengthening Gen-9 (Xbox Series X|S).
