Microsoft initiates major restructuring of Xbox gaming division
Microsoft initiates major restructuring of Xbox gaming division
Updated at: June 20, 2026 at 05:15 AM
In June 2026, Microsoft announced a major restructuring of its Xbox division to combat ongoing financial instability.
After a five-year period of high spending and declining revenue, new CEO Asha Sharma has initiated a 'business reset' to secure the future of the brand.
The division, which is currently operating with a thin 3% profit margin, is facing significant challenges, including a 33% drop in hardware sales and rising manufacturing costs due to competition for tech components.
To address these issues, Microsoft is considering radical options, such as spinning Xbox off as an independent entity or restructuring it as a subsidiary.
As part of a cost-cutting initiative, approximately 1,000 employees face potential layoffs, and the future of several major game studios remains uncertain.
Despite these hurdles, Microsoft remains committed to its next-generation console, 'Project Helix,' as it attempts to adapt to a difficult climate in the global gaming industry.
