Microsoft has made sweeping cuts to its Xbox division this week, announcing 1,600 immediate layoffs with a further 1,600 expected over the next fiscal year, along with the shedding of four studios. Xbox CEO Asha Sharma described the business as "not healthy" and admitted the company had "spread ourselves too thin", prompting speculation that Microsoft — increasingly focused on AI and infrastructure — could eventually exit gaming altogether by selling off Xbox. This matters because Xbox remains a major player in the industry, yet its strategic role within Microsoft has never been clearly defined, raising the question of who could realistically buy it.

Analysts consulted by The Verge suggest a full sale is possible but unlikely, largely because few buyers would want an interactive-entertainment conglomerate generating north of $23 billion in annual revenue. NYU professor Joost van Dreunen and IDG Intelligence's Yoshio Osaki note that traditional big spenders such as Tencent, NetEase and Saudi Arabia's Savvy Games Group are pulling back, while tech and entertainment giants like Meta, Amazon, Netflix and Disney have moved away from major gaming acquisitions. The price would also be prohibitive: for comparison, EA's take-private deal valued it at $55 billion and Microsoft's Activision Blizzard purchase cost $68.7 billion, so the whole of Xbox — spanning franchises, studios like Bethesda and Mojang, and its hardware business — would cost significantly more. Both analysts therefore see a piecemeal sale of individual studios, IPs and teams as the more probable outcome.