85%
Highly Likely
On the 25th anniversary of its foundation, Xbox finds itself in a desperate fight for survival while its parent company, Microsoft, weighs all scenarios, including a sale.
The arrival of new CEO Asha Sharma heralded many big changes in just her first 100 days on the job, and this week, she signaled that a wholesale "reset" of the Xbox division is in order to offset its measly 3% margins, including layoffs reportedly underway later this month. However, a new report from The Information suggests Microsoft leadership also has its own plans regarding Xbox. The trustworthy insider website cites three sources alleging that Microsoft is exploring structural changes to its Xbox division as part of a broader overhaul.
Options under consideration include spinning Xbox out as a separate entity, turning it into a wholly-owned subsidiary (similar to how Microsoft operates LinkedIn and GitHub), which would make it easier to sell, or forming a joint venture with outside partners. No decision is believed to be imminent, but the possibilities are actively on the table and have not been ruled out by CEO Satya Nadella or CFO Amy Hood. The first option was actually floated earlier this year by Alinea Analytics analyst Rhys Elliott as an interesting possibility that could allow Xbox to flourish outside Microsoft's heavy influence.
On the games side, Nadella and Hood have signed off on plans to increase spending on premium first-party titles in the fiscal year starting in July, with a sharper focus on major franchises such as Halo, Fallout, and Elder Scrolls. The latter two are described as particular priorities for Xbox CEO Asha Sharma, who had indeed publicly teased this in her memo:
We are the fortunate stewards of industry-defining franchises that have enormous potential and player demand, but we have not adequately funded them to compete and win.
This ties with speculation that Compulsion Games and/or Double Fine, whose recent games South of Midnight, Keeper, and Kiln haven't done well, could be on the chopping block. Hopefully, if that happens, they are at least sold to another publisher or allowed to go independent rather than be shut down.
In other troubling Xbox news, a report revealed earlier today that they might be losing a lot of money on each console sold due to the jacked-up memory prices.
About the author: With over two decades of experience in gaming journalism, Alessio Palumbo has led the gaming vertical at Wccftech since August 2015. He started working at a young age for Italian websites like Everyeye.it, Gamestar.it, Nextgame.it, and Multiplayer.it before kickstarting the indie English-language publication Worlds Factory as its founder and Editor in Chief. In the last decade, he has coordinated the overall output of Wccftech's gaming section, managed PR relations, assigned reviews, produced daily news coverage, edited gaming content as needed, and delivered game reviews. Arguably, his trademark content is the long series of exclusive developer interviews that have been cited by Wikipedia and by the biggest news media and gaming publications. His passion for technology also makes him knowledgeable when it comes to gaming hardware and tech. His favorite genres include RPGs, MMORPGs, and action/adventure games.
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