Microsoft Considers Potential Xbox Spinoff Amid Business Concerns

WHO:

Fast Company - Asha Sharma is the newly appointed CEO of Xbox.

Fast Company - Matt Booty is the Chief Content Officer of Xbox.

GamesIndustry.biz - Satya Nadella is the CEO of Microsoft.

GamesIndustry.biz - Amy Hood is the CFO of Microsoft.

WHAT:

Fast Company - Microsoft is considering a spinoff or restructuring of its Xbox gaming unit.

Fast Company - Xbox hardware sales were down 33% year over year.

Fast Company - Microsoft has spent over $20 billion on Xbox over the past five years, excluding Activision Blizzard.

Fast Company - Xbox's annual revenue has declined by nearly half a billion during that time.

GamesIndustry.biz - Microsoft is planning further layoffs in the Xbox division.

GamesIndustry.biz - Asha Sharma has lowered Game Pass prices to attract new subscribers.

WHERE:

Fast Company - The Xbox division is part of Microsoft, headquartered in Redmond, Washington.

WHEN:

Fast Company - Asha Sharma took charge as CEO of Xbox in February.

Fast Company - A new round of layoffs is expected in the next month.

GamesIndustry.biz - Asha Sharma marked her first 100 days as CEO with a blog post.

WHY:

Fast Company - The Xbox division's bets on subscriptions and cloud gaming have not met expectations.

Fast Company - Rising costs of computer memory have hindered sales of current consoles and the next generation system (codenamed Project Helix).

GamesIndustry.biz - Satya Nadella stated that the games division needs to be turned into a "sustainable business."

HOW:

Fast Company - Microsoft is exploring options such as a spinoff, restructuring, or forming a joint venture to facilitate the sale of Xbox.

Fast Company - Xbox leaders acknowledged the need for a new business model and partnerships for hardware.

GamesIndustry.biz - Nadella emphasized the need for innovation in hardware and games in an economically viable way.

(UPDATED June 15, 2026 18:35 UTC)

Asha Sharma has been appointed as the new CEO of Xbox, taking over a division that has seen a significant decline in hardware sales, down 33% year over year, and is now facing potential layoffs and restructuring. Microsoft has invested over $20 billion in Xbox over the past five years, but the division's revenue has dropped by nearly half a billion during that time, prompting discussions about a new business model and partnerships. As part of her strategy to attract new subscribers, Sharma has lowered Game Pass prices, while Microsoft is exploring options like a spinoff or joint venture to revitalize the Xbox brand.