A new report suggests that Microsoft may be considering a “spin-off” of Xbox into its own standalone organization.
These fresh claims, flagged by The Information and also covered by Windows Central, indicate that Microsoft “hasn’t excluded” reshaping Xbox—and could even take further steps such as turning it into a “wholly-owned subsidiary” or forming a “joint venture with other partners”.
According to the sources, Microsoft does not “have any immediate restructuring plans,” yet it acknowledges that “those options are available” should they help “enhancing Xbox as a more prosperous business”.
The same report further stated that “Xbox will expedite the development of new titles from cherished franchises it owns,” with examples including first-party intellectual properties such as Halo, Fallout, and The Elder Scrolls. It’s also thought that the latter two are “specific focal points” for new CEO Asha Sharma, who is weighing “investing more in premier games in the upcoming fiscal year”.
This latest development follows a bewildering run of rumors and speculation, including claims that Xbox is reportedly trimming budgets and preparing for layoffs of a “significant” group of employees. The moves are described as part of Sharma’s business “reset” for the Xbox brand, which also involves keeping Gears of War: E-Day as a console exclusive in order to draw back its core audience.
The earliest of these reductions is expected in July, shortly after the close of the company’s fiscal year. As cited by Bloomberg sources, Xbox is also preparing major reductions to its marketing budget after Sharma’s remarks about the financial challenges Xbox is facing, with the acknowledgment that it is not in “a healthy condition”.