Microsoft Xbox division faces restructuring and possible integration into Windows

Microsoft CEO Satya Nadella said the Xbox business must become financially sustainable, noting that “more monetization of Xbox games happens on YouTube than Microsoft itself.” He cited rising costs from cloud, AI and semiconductor shortages and signaled a deep restructuring of the division.

Former PlayStation Worldwide Studios head Shuhei Yoshida posted a tweet predicting that “Xbox will dissolve inside Windows,” echoing reports of large layoffs and a shift toward tighter integration of Xbox titles with the Windows operating system. Both comments highlight Microsoft’s consideration of turning Xbox into a component of its broader Windows ecosystem, though the company maintains that its console business remains “healthy.”