Microsoft's Xbox division has reportedly been the subject of interest from several private equity firms, with some valuing the gaming giant at as much as $150 billion, according to a report from The Information.
These firms were reportedly exploring the possibility of purchasing Xbox but did not initiate formal negotiations with Microsoft. This comes after a recent claim by Fortune that internal Microsoft discussions have considered an "eventual sale, spin-off, outside investment, or conversion into a subsidiary." A high-level presentation detailing potential scenarios was reportedly delivered after Asha Sharma assumed leadership of Xbox.
However, Sharma has previously dismissed rumors of a sale, stating in the past that "Xbox is not for sale" and that the company would pursue necessary partnerships and operational models for success. Despite these assurances, Microsoft CEO Satya Nadella has publicly expressed a desire for Xbox to become more financially self-sufficient. Xbox currently operates with a profit margin of approximately 3%, a figure Nadella has indicated needs improvement given Microsoft's significant, multi-billion dollar investment in gaming over two decades.
Since Sharma's takeover, Xbox has undergone a strategic "reset" aimed at improving profitability. This has led to workforce reductions across various departments and the divestment of several studios. Concurrently, Xbox is pursuing an aggressive expansion strategy. New initiatives include Xbox XP, which will focus on non-gaming multimedia projects, and Xbox Labs, an apparent response to the growing trend of web browser-based gaming experiences.