Microsoft considering structural changes for the Xbox division

Microsoft's Xbox division is currently undergoing a significant strategic reset.

Since Asha Sharma took over as CEO in February 2026, the company has faced intense pressure to improve profitability after years of heavy spending.

Despite massive investments—including the $69-billion Activision Blizzard deal—the division has seen declining revenue, forcing leadership to reconsider its future.

Microsoft is now evaluating various structural changes to make the business more sustainable.

These moves aim to foster greater autonomy and improve financial performance.

The shift has created a climate of uncertainty, with potential studio closures and budget cuts affecting teams like Ninja Theory and Double Fine.

Moving forward, Microsoft plans to double down on blockbuster franchises like Halo and The Elder Scrolls while moving away from its previous hardware-centric model.