Microsoft evaluates Xbox restructuring after $69 bn Activision deal

Microsoft is reportedly weighing several options for its Xbox division, including a full spin‑off as an independent company or a joint venture with outside investors. The move comes three years after the $69 billion purchase of Activision Blizzard, which has not delivered the expected margins. Game Pass growth has slowed and console sales fell after price hikes, leaving the Xbox unit with profit margins around three percent despite more than $20 billion in recent investments.

Internal sources say the company is exploring scenarios ranging from a formal separation to a nominal independence with its own leadership structure, while retaining the Xbox brand. No decision has been made, and any restructuring could be accompanied by further cost‑cutting measures, including a planned round of layoffs after the fiscal year ends on June 30. The changes would affect how Xbox services such as Game Pass and cloud gaming integrate with Microsoft’s broader cloud and software ecosystem.