Overview
- Reports from The Information, summarized by Reuters and multiple outlets, say Microsoft is actively evaluating options to spin off Xbox, convert it to a wholly owned subsidiary, or form a joint venture to enable outside investment or an eventual sale.
- Satya Nadella said Monday that Xbox must become a sustainable business and said more monetization of Xbox games happens on YouTube than at Microsoft, framing the push as a fix for weak revenue and subsidy-driven losses.
- Senior leaders have provisionally approved Asha Sharma’s proposal to increase spending to speed development of flagship franchises such as Halo, Fallout, and The Elder Scrolls, though final budgets remain unconfirmed.
- Xbox is reassessing its next console, codenamed Project Helix, after DRAM and storage price spikes increased hardware costs sharply and raised questions about device pricing and alternative subscription or hardware models.
- Sharma told staff that Microsoft has spent more than $20 billion on Xbox (excluding Activision Blizzard) and that annual Xbox revenue has fallen by roughly $500 million, and multiple reports say significant layoffs and broader budget cuts are being planned after the fiscal year end.