The last couple of Xbox events I’ve attended, including BlizzCon, I noticed I was getting the same question from industry figures and fans alike: is Microsoft gearing up to sell Xbox?
Microsoft’s vast layoffs across the summer have hit Xbox in their thousands, with studios like Ninja Theory on the path to being closed, and others like Double Fine being divested completely. Microsoft has effectively shut down Halo Studios itself and handed off the franchise to Call of Duty showrunners instead, as Xbox aggressively seeks to restructure for its next decade.
A decade that might not arrive, that is, if these “sell off” rumors turned out to be true. Many analysts and industry figures have opined that the cuts are designed to make Xbox “leaner” and more attractive to a potential buyer. When you dig down into it, these commentaries don’t make a lot of sense; why would Xbox keep smaller franchises like Age of Empires even at a reduced clip, or try to rebuild Halo at all if it was indeed looking to sell?
Regardless, even senior industry figures like Shawn Layden of PlayStation fame described Xbox as being in its “Dreamcast phase” recently, referring to the time Sega exited the hardware business. A lot of these comments tend to emerge from industry figures who seem particularly aggrieved by Xbox, though, regardless of actually being a customer or not.
Indeed, actual Xbox customers have been generally optimistic about the way Xbox has been heading. Nobody (sane) revels in layoffs, but purely mathematically speaking, it was unclear how some of Xbox’s ‘niche’ kind of games like Keeper, Kiln, or Hellblade 2 were going to be self-sustainable for the studios that produced them. There’s a lot of valid criticism to be levied at the leadership figures that allowed for projects that were quite obviously going to be unsustainable.
Sharma has promised deeper investment in the very-long-dormant Fallout franchise, promised to restructure and rebuild Halo, and continues to promise Xbox Helix, the long-awaited next-gen console. Sharma has declared intent to invest in Xbox’s biggest brands, leveraging TV shows, movies, and other transmedia opportunities to find new users. Despite this, there still runs the idea that Xbox could end up being divested from Microsoft itself, owing to a report from The Information earlier in the summer that Microsoft was exploring the idea.
The NYT interviewed (paywall) Sharma recently covering the Xbox layoffs generally. The outlet said that Asha “did not stall” in declaring Xbox not-for-sale.
“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. […] We’ve got a long way to go with Microsoft and we’re going to take the long-term view.”
Microsoft CEO Satya Nadella is to blame for the lack of faith in the Xbox business from mainstream figures
The NYT quite patronizingly called the comment a “bob and weave” seemingly unwilling to let go of the idea of divestiture. It’s great shareholder bait; Xbox has long been an aspirational type of product, and it has been a loss leader in some regards. Microsoft CEO Satya Nadella has remarked in the past about how, despite the fact Xbox isn’t a huge profit generator, fandom of the brand has led to lucrative deals for Azure on the business side of things. Yet, shareholders would love nothing more than for Microsoft to quit the difficult and risky game industry to dive all-in on AI psychosis products instead.
Indeed, under Microsoft CEO Satya Nadella, the company has seen a near total retreat from consumers in general. Surface is on its death bed, Windows Phone was killed off, all consumer hardware products were effectively shelved. Microsoft’s retail stores were closed, customer support is anaemic to non-existent, and Windows itself has seen huge declines in popularity and trust. Even Microsoft Copilot has undergone a work-focused update, ditching their (admittedly terrible) consumer-oriented features.
Nadella is absolutely not consumer-savvy in general. Nadella’s Microsoft strategy paints the Xbox business as a sore thumb on a very boring, cold, sad, and business-oriented IBM-style Microsoft — a Microsoft chasing cultural irrelevancy.
RELATED: To save Xbox, Asha Sharma needs to defeat Microsoft itself
It’s no wonder that mainstream media can’t understand why Xbox could exist in this current incarnation of Microsoft, and it’s through no fault of previous Xbox leaders, Asha Sharma or Xbox in general.
The one saving grace here is that Nadella has, for some reason, continued to allow Xbox to exist — likely against the wishes of shareholders and his generalized anti-consumer and anti-customer instincts. Nadella claimed in an internal meeting that Microsoft will “always” be in gaming, and will take a “long view” on its future. But it’s really, really easy to understand why the trust isn’t there. We wouldn’t even have this commentary from Nadella if I hadn’t literally leaked the meeting’s audio myself.
The NYT noted that Nadella declined to participate in the interview. He really should have participated in my opinion, because this generalized lack of faith comes from his strategies and public-facing comments.
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