Is Microsoft selling Xbox? Here's why rumours are growing

If you haven't been following Xbox news, here's the short version: Microsoft's gaming division is going through its biggest shake-up in years, and it's raising a question nobody expected to be asking seriously: could Microsoft eventually sell Xbox altogether?

Earlier this year Asha Sharma was appointed the CEO of Xbox, taking over from its long-time head, Phil Spencer, after leading the company for more than ten years. Not long into the new job, Sharma, along with the recently appointed chief content officer, Matt Booty, circulated a memo to employees about an "Xbox reset".

They pointed to thin profit margins, sharply rising costs for console parts due to a global memory and storage shortage, and a game-studio portfolio that had grown too large to sustain.

Is Microsoft selling Xbox?

That warning became reality on July 6, when Microsoft laid off about 1,600 Xbox employees, with another 1,600 planned over the coming fiscal year, bringing the total to roughly 3,200 job cuts. Alongside the layoffs, four studios are leaving the Xbox umbrella.

Compulsion Games and Double Fine Productions will become independent again, while Ninja Theory and Undead Labs are being sold to new owners. Arkane Studios is now reviewing its own future.

Smaller cuts are also hitting teams at Activision, Bethesda, Blizzard, King, and Mojang, including roughly half of Doom developer id Software's staff.

In and of itself, none of the above proves anything about a Microsoft Xbox sell-off. In combination with the higher hardware expenses and substantial investments in artificial intelligence, however, some industry experts consider that a complete or partial sale of Xbox has become a feasible scenario.

NYU professor Joost van Dreunen stated in an interview with The Verge that a complete divestiture "remains on the table" but believes that the former scenario is somewhat less likely because there are few companies who can and want to take up such an asset.

It seems more realistic for industry experts to expect partial deals rather than a huge buyout of the company, similar to the existing situation of Ninja Theory and Undead Labs' acquisitions. Both Tencent and Netflix, two large-scale potential buyers of the company, have lately withdrawn from major gaming deals.

Even with the reduction in staff, Xbox has maintained a large number of franchises and studios under its belt, such as Halo, Fallout, Minecraft, Call of Duty, Forza, Gears of War, and Overwatch.

Sharma has also given hints about the next-generation gaming console under development at Microsoft, which is called Project Helix. In addition, Sharma put Mojang, makers of Minecraft, and King, maker of Candy Crush, under Xbox, making them part of Xbox’s largest platforms in terms of monthly users.

Sharma is barely six months into her tenure as CEO, so most analysts agree that it will take some time before the future direction of Xbox becomes apparent. The timeline ranges from "year-end" to “two years from now".