One of the big questions emerging from Asha Sharma’s appointment as Xbox CEO earlier this year, and the subsequent layoffs and restructuring that have occurred in recent days, revolves around the long-term future of Microsoft’s gaming business. Will Microsoft sell off Xbox? Are the changes that started this week laying the groundwork for a sale?
A recent report claimed Sharma wanted to speed up development on new The Elder Scrolls, Fallout, and Halo games as part of the company reset. Details on the 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’s said the move could result in Xbox being operated as a joint venture with other partners or even potentially sold.
Sharma’s Xbox reset has since become clearer. 1,600 staff were let go on Monday, with another 1,600 staff to go before the end of the current financial year (this has left Xbox staff who have survived this week’s cull facing an anxious wait to find out if they, too, will be cut over the coming months). Four studios have left Xbox, with another set to be sold or shut down. Projects have been canceled. Bloomberg’s Jason Schreier has said that Avowed and The Outer Worlds developer Obsidian Entertainment has laid off a quarter of its staff and Avowed 2 was canceled. Obsidian has now been put to work on a new Fallout game. Doom developer id Software was gutted. Staff at Bethesda Game Studios have expressed concern about The Elder Scrolls 6 following cuts there, too.
Some believe this reset and the cuts that have come with it are part of a strategy to make Xbox easier to sell. But analysts told The Verge that Xbox would likely have few suitors interested in buying the business outright. Consider that Microsoft bought Activision Blizzard for an eye-watering $69 billion. Given Xbox’s huge payroll, studio setup, and hardware business, it would likely cost a company hundreds of billions of dollars to acquire.
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