If Microsoft sells Xbox consoles, who will buy them?

This week, Microsoft took a big shot at its Xbox business. The company announced that it will lay off 1,600 workers now, another 1,600 during the next fiscal year, and that it will get rid of four studios. Xbox CEO Asha Sharma hasn’t been shy about why she’s making such dramatic cuts. Saying in the note that Work is “not healthy.” talking to luckshe He said that “We are simply spreading ourselves too thin.”

Due to the size of the changes and Xbox’s currently ambiguous strategy is to focus only on big gamesIt is unclear what the future of the platform is. Since Microsoft is investing so much of its resources into all things AI, a struggling consumer business with a difficult future doesn’t necessarily seem like a good fit for the company. Which opens up the possibility that Microsoft is preparing to eventually exit the gaming business entirely by selling Xbox. This, in turn, raises a bigger question: Who can buy an Xbox?

Although nothing has been confirmed, Microsoft’s recent moves make selling the brand seem like a likely option, says Joost van Dreunen, a professor at New York University. Edge. “A wholesale divestiture of Xbox is still on the table, and seems more likely given Xbox’s struggles with rising hardware costs and Microsoft’s focus on AI and infrastructure,” he explains. “It has never been clear what role Xbox plays in Microsoft’s flywheel.” But a full sale is “the least likely path,” van Dreunen says. Few buyers, even giants like Netflix, Amazon, Tencent, or a sovereign wealth fund that could theoretically afford such a business, would want a “full-fledged interactive entertainment conglomerate with annual revenues of about $23 billion.”

Despite the cuts, Microsoft still has a lot under the Xbox umbrella. Runs a hardware sales companyIncreasingly expensive) Xbox Series Tease the next-gen Xbox controller, Which bears the code name Project Helix. It still manages a huge roster of game developers: Halo Studios (which works on… aura), Bethesda Game Studios (He falls, Sheikh Manuscripts), Mojang Studios (Minecraft), Call of duty Studios like Infinity Ward, Treyarch, and The Coalition (Gears of war), playground games (Forza Horizon, myth), Blizzard Entertainment (Monitoring, cans), king (Candy Crush), and rare (Sea of ​​Thieves). (My city He has a great list of Current status of Xbox Studiosif you want a refresher.)

says Yoshio Osaki, president and CEO of market research firm IDG Intelligence Edge “I think all options are on the table, taking into account the radical measures that have already been taken to try to restructure the business at both a cyclical and structural level.” Osaki points out that in “earlier years,” a company like Tencent might have explored the possibility of bulk purchasing, “since the Western market, especially console, was more elusive to them.”

But at present, Tencent seems to be retreating from this area, as it stands now It is said that he is searching To negotiate an exit from several gaming investments in Japan. The move follows other reported withdrawals from groups that were known for their sweeping investments in gaming, including the Chinese internet giant. netease and Savvy Games Group, funded by the Saudi government. As for another big tech company acquiring Xbox, that seems unlikely; Osaki points out that Mita seemed to be moving away from gaming after that Recent Metaverse layoffs and VR studio closuresWhile Amazon Focus more On its Luna cloud gaming service and using games to highlight other properties centered around them, such as James Bond and Tomb Raider.

Osaki notes that entertainment companies such as Netflix and Disney could also be potential buyers, but their gaming strategies have generally “deviated” from major mergers and acquisitions in recent years. Netflix, for example, has had a presence in gaming for years, but has given up a lot Prestigious independent titles in its mobile catalog And a A AAA studio that never released a game In favor of TV games Players can control it using a smartphone. While some of the more affordable Xbox prices, e.g Candy Crush or Minecraftcould fit into Netflix, it seems unlikely that there will be such a thing aura or Sheikh Manuscripts It would translate well to a TV party game.

We don’t know what price Microsoft is asking for the Xbox. But part of the reason there are so few potential suitors is likely because if we look at other recent mega gaming deals, the price would be too high. EA’s exclusivity deal values ​​the company In the amount of 55 billion dollars. Microsoft acquired Activision Blizzard in A deal worth $68.7 billion. The entire Xbox hardware, including things like franchises, studios, and the hardware business, will cost much more.

Van Dreunen says the most likely scenario is that big players might go after “specific parts” of Xbox’s business. Osaki similarly points out that it’s possible that “individual studios, IPs, and teams could be sold or spun off piecemeal.” Microsoft has already shown that it is willing to do this; It allowed Duress Games and Double Fine Productions to Go to an independent worldWhile Ninja Theory and Undead Labs were sold to unspecified buyers.

Sharma hasn’t been in her role for six months, so it may be a while before we see the full ramifications of her decisions. Many of the remaining studios focus on household names such as aura, Call of duty, cans, Minecraftand Candy Crushindicating that Xbox is focusing on large properties. Sharma is also elevating Mojang and King by having them report directly to her, saying the studios are “increasingly becoming platforms and our largest in terms of monthly active players.” Minecraft It could be a preview of the upcoming Xbox model; Sharma believes that Microsoft has not invested heavily in the game, according to Game fileand appointed Helen Chiang, former vice president of the company Minecraft franchise, to be Xbox’s first COO.

Opinions vary on when we’ll get a clearer view of Xbox’s future. Osaki believes that will be by “the end of the year,” while Van Dreunen says it could be “within 24 months.” But what’s clear is that whatever fate awaits Microsoft’s gaming division, the changes at Xbox are far from over. “While Microsoft is looking to save money on building AI, downsizing Xbox or selling off parts of it seems worth it,” Van Dreunen points out.