According to a new report from The Information, Microsoft's leadership is exploring various options for the future of its gaming division, including spinning it off into a separate entity or even a potential sale.
The situation is developing amidst significant changes within Xbox following the appointment of Ashi Sharma as the new CEO of the division. In her first hundred days in office, she initiated a series of reforms and recently stated the need for a complete "reboot" of the Xbox business. The reason cited is the extremely low profitability of the division — about 3%. Additionally, a new wave of employee layoffs is expected at the end of June.
According to sources from The Information, Microsoft is considering several scenarios for reorganizing Xbox. Among the discussed options are transforming the gaming division into an independent company, creating a subsidiary similar to LinkedIn and GitHub, or forming a joint venture with external partners. A final decision has not yet been made, but Microsoft CEO Satya Nadella and CFO Amy Hood are not ruling out any of these options.
Interestingly, the possibility of spinning off Xbox into a separate company has been previously discussed by analysts. According to Alinea Analytics analyst Rhys Elliott, such a move could allow the brand to develop more independently from Microsoft's influence and focus on its own strategic goals.