Microsoft weighs spinning off Xbox into independent subsidiary

Microsoft is assessing options to restructure its Xbox gaming division. Options under review include turning Xbox into a wholly‑owned subsidiary, creating a joint venture with an external partner, or eventually selling the business. The move is part of a broader effort to address declining console sales and limited exclusive titles while continuing to push subscription and cloud‑gaming services.

New Xbox head Asha Sharma plans to increase R&D spending on flagship franchises such as Halo, Fallout and The Elder Scrolls. CEO Satya Nadella and CFO Amy Hood have approved a higher development budget for the next fiscal year, but no final organizational decision has been made and the proposals remain at the discussion stage.