In the midst of a turbulent year marked by thousands of layoffs and the breakup of Xbox Game Studios, Microsoft’s gaming division has issued its most direct rebuttal yet to rumors of a potential sale. Xbox CEO Asha Sharma, who took the helm in February, made clear in a New York Times profile that despite the sweeping restructuring, the company remains firmly committed to the games business and is not being put on the market.
The clarification arrives during a period of significant contraction for the division, which has divested from four studios and canceled multiple projects this year. Sharma pushed back against the narrative that Microsoft’s “reset” — which has resulted in hundreds of job losses and studios shifting across the company’s owned publishers — signals an exit from gaming. “We’ve got a long way to go with Microsoft,” Sharma told the Times, “and we’re going to take the long-term view.”
A New Direction from Sharma
Sharma replaced former Xbox head Phil Spencer in February and has since implemented sweeping changes that mark a stark departure from the previous era. Emphasizing that “the industry will require disruption,” her leadership has introduced several controversial moves, including lowering Game Pass prices amid declining subscriber numbers and removing new Call of Duty games from day-one availability on the subscription service.
Additional radical changes to Xbox Game Pass have been rumored, and Microsoft has recently imposed time limits on cloud gaming for subscribers. These decisions have drawn scrutiny from the gaming community, even as Sharma maintains that the restructuring is necessary for the company’s long-term viability.
“Xbox is not for sale. We will do whatever it takes to set the company up for success, and we will look at the right partnerships, the right operating model and everything needed to achieve that.”
Asha Sharma, Xbox CEO
Strategic Partnerships Take Center Stage
Among the new partnerships Sharma has cultivated, Microsoft recently confirmed a deal with Kojima Productions to publish Physint, the Metal Gear Solid spiritual successor. According to the Times profile, the agreement — which came after Sony dropped the game — was “substantially below what Xbox would typically spend to develop a premium game” and includes TV and film rights to the Physint intellectual property.
This deal represents a shift toward more calculated, cost-effective partnerships as Microsoft restructures its approach to game development and publishing. The acquisition of broadcast rights also signals a broader vision for expanding the franchise beyond gaming.
While Sharma and her team appear to have some runway to figure out the right operating model for Xbox, the road ahead remains uncertain. Hundreds of additional layoffs are still planned at the company, and the impending launch of Project Helix, the next-generation Xbox console, looms on the horizon.
Looking Ahead
Whatever plan the Xbox group has in place now could change at any time, given the ongoing restructuring and the company’s stated willingness to explore new operating models. With Project Helix on the horizon and continued workforce reductions, Microsoft’s gaming division remains in a state of flux as Sharma works to redefine Xbox’s role within the broader Microsoft ecosystem.
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