Microsoft hasn’t ruled out spinning off Xbox

Microsoft is reportedly preparing significant Xbox layoffs while reassessing plans for its next-generation Project Helix console. The company has considered major structural changes for Xbox, including making it a wholly owned subsidiary, forming a joint venture, or potentially spinning off or selling the business, though no move appears imminent.

The report signals growing pressure on Microsoft to make Xbox more sustainable after years of hardware challenges and shifting gaming economics. A possible spinoff would mark a major break from Microsoft’s long-running console strategy and could accelerate the industry’s move toward services, subscriptions, and platform-agnostic gaming.