GoKawiilLooking ahead: Since taking over Xbox earlier this year, Asha Sharma and Matt Booty have hinted at radical changes in the coming weeks to turn Microsoft's struggling game console business around. New reports indicate that little is off the table, including steps that could lead to a sale of the division.
People familiar with the matter told The Information that Microsoft executives have not ruled out restructuring Xbox as a wholly owned subsidiary or even a joint venture. Although no such plans are currently in place, they remain a possibility.
If doing so would turn Xbox's fortunes around, Microsoft could reorganize the division into something resembling its other subsidiaries, such as LinkedIn and GitHub. The tech giant could also find a partner to run Xbox as a joint venture or spin the division out. As the news spread, former PlayStation CEO Shuhei Yoshida rather pessimistically predicted that Xbox would "dissolve" into Windows, possibly referencing Microsoft's plans for the next Xbox console, codenamed Helix, to support PC games.
Asha Sharma has promised a dramatic change of course since becoming the new Xbox CEO in February. So far, that has included included turning away from multiplatform game releases and lowering the cost of Microsoft's Game Pass subscription service.
In a recent memo, Sharma hinted at more big changes on the horizon, which could include significant layoffs to help control costs. Chief Strategy Officer Matthew Ball also recently floated the idea of using in-game ads to help offset costs. Spending tens of billions of dollars on game studios and content over the past several years has not lifted Xbox console sales, the division's profitability is falling, and the gaming industry at large currently faces skyrocketing memory costs.
Despite the challenges, Microsoft CEO Satya Nadella and CFO Amy Hood have given Sharma the green light to increase spending to expedite the development of major franchises such as Halo, Fallout, and The Elder Scrolls. While another Xbox titan, Gears of War, is receiving a prequel later this year, Halo, Fallout, and The Elder Scrolls have not seen significant new releases in several years.
Microsoft is set to release a remake of the first Halo title next month, but the status of the next installment's development remains unclear. After Halo Infinite's disappointing 2021 launch bruised the Xbox Series X/S rollout, developer 343 Industries was reorganized into Halo Studios, and the next entry shifted from an in-house engine to Unreal Engine 5.
Meanwhile, Bethesda's The Elder Scrolls VI is nowhere to be seen eight years after its initial announcement. Since shipping Starfield, which also failed to revive Xbox sales, the studio has shifted to The Elder Scrolls VI, but CEO Todd Howard recently confirmed that it remains years away. The last installment, 2011's The Elder Scrolls V: Skyrim, is one of the best-selling games of all time.
Fallout seems even further out – Bethesda does not plan to start production until after finishing The Elder Scrolls VI. However, a remaster of Fallout 3 is rumored to be coming soon. In the meantime, fans have hoped that Microsoft might hand Fallout to Obsidian, which currently employs Fallout creator Tim Cain and others involved with the first two installments. InXile, another Microsoft subsidiary, also has links to the franchise.