Asha Sharma Says Xbox Is Not for Sale After the Reset

Xbox is not for sale, CEO Asha Sharma said on Sept. 30, eight days after another 268 jobs were cut and Halo was handed to Activision. She added that Xbox will still hunt for the right partnerships and the right operating model. The first sentence shuts down a summer of spin-out talk. The second leaves the shape of the company open.

Sharma’s Denial Leaves Room for a New Operating Model

Sharma, 38, took the job in February with no games background, after a run as president of product in Microsoft’s CoreAI group and as chief operating officer at Instacart. Asked whether the endgame was to sell the division, she did not hedge the headline and did not close every door behind it.

Xbox is not for sale. We will do whatever it takes to set the company up for success, and we will look at the right partnerships, the right operating model and everything needed to achieve that.

Asha Sharma, Xbox CEO, September 2026 interview

She also said Xbox still reaches 500 million players every month, and that the company will take the long-term view inside Microsoft. “We’ve got a long way to go with Microsoft,” she said. In the same conversation she argued the industry will require disruption, a line that already describes her first year more clearly than a sale rumor does.

That pairing is the whole statement. A sale is off the table in her telling. A joint venture, a subsidiary wrapper, or some other operating model is not, because she named those tools in the next breath. In February she had already put it more bluntly: the plan is the plan until it is not the plan.

Halo, Rare and Age of Empires Now Sit With Activision

The denial landed after a Sept. 22 note from Matt Booty, Xbox’s executive vice president and chief content officer. Booty told staff Xbox was eliminating 268 roles across Halo Studios, other first-party studios, and the Xbox Game Studios management layer. He also redrew the studio map so that fewer bosses control the franchises Microsoft actually wants to ship.

Activision now holds World’s Edge and Rare, which means Age of Empires and Sea of Thieves report through the Call of Duty company. Activision will also make the next Halo with a new, purpose-built team that Booty said is separate from ongoing Call of Duty work. Halo Studios shrinks to a small crew supporting games already in market and the community around them.

WHERE THE STUDIOS LANDED

Bethesda takes Obsidian. King takes Microsoft Casual Games. Playground Games and Turn 10, partners on racing games for more than a decade, become one studio aimed at Forza and Fable. Booty wrote that the point was to strengthen franchises by running fewer business units and lining up groups that already work together.

Independent Xbox Game Studios, as a row of shops with their own bosses, is the thing that actually ended in that memo. Whether Microsoft keeps the parent brand or not, Halo’s next game is an Activision production, and Fallout’s next collaboration sits under Bethesda. That is a cleaner org chart. It is also the org chart a buyer, a partner, or a joint-venture lawyer would want to read.

The July Letter That Called Xbox Unhealthy

On July 6, Sharma told staff Xbox was beginning the most significant restructure in its history. She cut about 3,200 roles through fiscal 2027, which ends in June 2027, including about 1,600 that day, and said four studios would leave for new management. Microsoft cut 4,800 jobs company-wide on the same date.

THE JULY RESET, IN HER FIGURES

• The diagnosis: Sharma wrote that the business was not healthy and was running at margins 3 to 10 times lower than comparable platform and publishing companies.
• The studio math: In a typical year Xbox lost 64 cents for every dollar it invested in studios she said it was not the best home for.
• The org chart: Work in some groups passed through as many as 14 management layers; she ordered a cap of 5, and 3 where possible.
• The platform bloat: Platform teams were 40% larger than at the start of this console generation, even as the player base and playtime had declined, and vendor spend was to fall 50%.

She blamed a smaller Gen 9 install base, a higher cost structure, and bets on Game Pass, multi-platform releases, and a wider content slate that “did not grow at the pace we expected.” Then came the hardware line: the industry, she wrote, is facing the most severe hardware crisis in its history. “We must reset Xbox.”

Helen Chiang became the first chief operating officer with end-to-end profit-and-loss responsibility across content, hardware, platform, and services. Mojang and King, the two largest studios by monthly players, began reporting directly to Sharma. Dave McCarthy retired after 17 years. Sharma still promised Xbox would invest as much this year as it ever has, with more focus, and said the division would return to growth in 2027. She wants Xbox to entertain more than a billion people each day, a different figure from the 500 million monthly players she cited later, and a target rather than a count.

In Maryland, union members planted hundreds of red flags after the summer cuts, one for every lost job. Sharma had been touring studios. The letter’s closing line was a warning to the company, not a comfort to the people leaving: history is full of companies that mistake longevity for inevitability.

What Nadella Means by Streamlining

Satya Nadella spent September praising the same purge in softer words. On the Sources podcast, published Sept. 25, he said he felt fantastic about the studios and the IP, then blessed the cuts. “There’s some amount of streamlining the team is doing, and Asha is doing, which is great to see,” he said. He added that Xbox still has to invent the right sustainable business model, and that Sharma’s team has said Xbox will get back to growth in the next fiscal year.

That is the parent-company position as of late September: keep Xbox, make it pay, and call the layoffs streamlining. In June, people with direct knowledge of the discussions said Nadella and finance chief Amy Hood had weighed a spin-off, a wholly owned subsidiary, or a joint venture, options that can make a later sale easier. Microsoft already runs LinkedIn and GitHub as wholly owned subsidiaries. Those people also said no move was imminent. By September the same executives had, according to those later accounts, swung behind Sharma’s overhaul instead.

A subsidiary is not a sale. It is the filing you make if you might want one. Sharma’s “right operating model” line sits on that spectrum, even while she rules out a buyer. Nadella’s “sustainable business model” sits there too. Neither man has to sell Xbox for the division to stop looking like the sprawling publisher that almost 40 studios across Xbox, Bethesda, Activision, Blizzard, and King when Sharma was named in February.

Ninja Theory’s Sale Collapsed After Two Deals

The July letter named four studios on the way out. Booty’s September update was the scorecard, and it was mixed. Compulsion Games and Double Fine Productions returned to their own management in August, with their IP, catalogs, and runway funding. Undead Labs later left on similar terms, with a new publisher, and will still release State of Decay 3 on Game Pass on day one.

Ninja Theory did not get out. Two separate sale agreements fell through. Xbox is now in consultation with staff on a proposed closure, while Booty said the company is still exploring other paths. Arkane in France remains in required consultation with its works council, with that process expected to run through the end of 2026.

THE RESET, MONTH BY MONTH

1. February 2026: Sharma becomes Xbox CEO, reporting to Nadella, with Booty as chief content officer.
2. June 2026: People with knowledge of the talks say Nadella and Hood weigh a spin-off, a subsidiary, or a joint venture.
3. July 6, 2026: Sharma announces about 3,200 job cuts through fiscal 2027, about 1,600 that day, and four studio exits.
4. August 2026: Compulsion and Double Fine go independent with their catalogs.
5. September 22, 2026: Booty cuts 268 more roles, folds remaining studios under Activision, Bethesda, and King, and starts Ninja Theory closure talks.
6. September 25, 2026: Nadella calls the streamlining “great to see” and says Xbox must invent a sustainable model.
7. September 30, 2026: Sharma says Xbox is not for sale and still flags partnerships and a new operating model.
8. October 6, 2026: Xbox holds an all-hands town hall to talk progress and the next game slate.

Count the bodies and the “three-quarters” line does not match. The 1,600 July cuts plus 268 in September equal 1,868 roles, which is about 58% of 3,200, leaving 1,332 jobs still in the plan through June 2027. Booty’s phrase was different on purpose. He said actions since July, inclusive of the studio divestitures, were roughly three-quarters of the way through the announced restructuring. Headcount and studio exits are being scored as one project.

Game Pass Did Not Grow Fast Enough

Sharma’s July letter is still the clearest account of why the reset exists. Xbox entered this generation with fewer consoles in homes and a cost base built for a bigger footprint. Game Pass, the multi-platform push, and a broader slate created value, she wrote, and still missed the growth the company had modeled. The core business weakened while Xbox added teams, money, and time.

Cloud is the escape hatch she keeps naming. She has talked about reaching players in Africa, Latin America, and South Asia without shipping a box into every living room. That bet already has a rationing problem at home, where cloud caps already hit the players who skipped consoles. A service built to replace hardware is a hard sell when hours are metered and memory prices are dictating what a next box can even cost.

The RAM crunch is the part of her letter that makes a console-led recovery look expensive. If a new Xbox is a luxury object, the 500 million monthly players have to come from PC, phones, and streams, which is why King, Minecraft, and Call of Duty matter more in this org chart than a mid-size narrative studio in Cambridge. Ninja Theory’s stalled sale sits right on that choice: a critically loved single-player shop in a company that now says it cannot own every great independent studio.

An All-Xbox Town Hall Lands on October 6

Booty told staff he would spend the following week with studios, then gather the company on Oct. 6. He previewed that meeting as a look at progress and “one of the strongest game lineups in our history.” The date is four days after this week’s denial. It is also where Sharma has to explain, in the same room as people who still have jobs, what “not for sale” means when Halo no longer lives at Halo Studios.

THE WORK STILL ON THE BOOKS

• Remaining cuts: About 1,332 of the 3,200 planned roles are still scheduled through June 2027, unless the plan changes again.
• Ninja Theory: Closure consultation is underway after two sale agreements collapsed, with other paths still described as open.
• Arkane: French consultation is expected to run through the end of 2026, with no outcome posted.
• Partnerships: Sharma has not named a partner, a subsidiary filing, or a joint-venture structure, only the willingness to look.

The four words everyone copied were the easy ones. Xbox is not for sale, on the record, as of Sept. 30. The rest of the sentence is the live one, because the company that said it has already moved Halo to Activision, parked Obsidian under Bethesda, and marked most of the reset complete. On Oct. 6 the people still inside Xbox get the next version of that story, and it will be about games on a calendar, not about a buyer who has not been invited in.