Xbox faces restructuring, possible spin‑off and studio closures

Microsoft's Xbox division is undergoing a 100‑day strategic reset led by CEO Asha Sharma. The memo to staff highlighted a slim 3% profit margin, $20 billion in investments over five years (excluding the $68.7 billion Activision Blizzard King deal), and declining revenue, prompting plans for layoffs, budget cuts and a refocus on core franchises.

Reports indicate the division may be spun off or reorganised as a wholly‑owned subsidiary, with discussions about joint ventures to improve financial sustainability. Microsoft CEO Satya Nadella emphasized the need to turn Xbox into a profitable business while noting growing monetisation of games on platforms like YouTube.

Potential studio closures include Compulsion Games (Canada), Double Fine (US) and Ninja Theory (UK), with negotiations for spin‑offs or buy‑outs. The reset also aims to accelerate development of flagship titles such as Halo, Fallout and The Elder Scrolls, while addressing Game Pass subscriber losses and exploring new financing models like buy‑now‑pay‑later options.