Whispers of Microsoft potentially divesting its Xbox division have resurfaced, with new reports indicating that several private equity firms had previously explored acquiring the gaming business. According to a blog post by The Information on October 20th, these firms considered the Xbox division to be worth between $100 billion and $150 billion.
This latest revelation lends further credence to long-standing rumors about Xbox’s future within Microsoft. The speculation dates back to at least June 2026, when The Information first reported that Microsoft had internally discussed options ranging from restructuring Xbox into a wholly-owned subsidiary to a potential future spin-off or sale.
Xbox’s Strategic Reset
In the wake of these discussions, the Xbox division has undergone significant changes. These include large-scale layoffs, studio restructuring, and adjustments to the Game Pass strategy. Many observers interpreted these moves as preparatory steps for a potential divestiture of the Xbox brand.
Valuation and Market Context
If valued at the higher end of the reported range, Xbox’s worth would approach or even surpass the $70 billion Microsoft paid for Activision Blizzard in 2022. Even if the Activision Blizzard acquisition is excluded from the calculation, the market valuation for the Xbox business alone was estimated to be between $30 billion and $80 billion.
However, despite these explorations and the ongoing speculation, Microsoft has repeatedly asserted its commitment to the Xbox brand. Asha Sharma, CEO of Microsoft Gaming, has explicitly stated that “Xbox will not be sold.” She emphasized that the team is focused on a long-term collaboration with Microsoft and on steering the business back toward a growth trajectory.
The potential sale or spin-off of a major gaming division like Xbox would represent a significant shift in the industry landscape. While private equity firms often look for opportunities to restructure and grow businesses, Microsoft’s stated commitment suggests that such a deal is unlikely in the immediate future. The company appears dedicated to integrating and developing its gaming portfolio under the Xbox umbrella, aiming to leverage its strengths in content, services, and hardware to drive future growth.
