Microsoft Secretly Considered Selling Xbox After Call of Duty: Black Ops 6 'Cannibalized' the Brand

Microsoft considered selling Xbox during internal discussions in recent months, according to a report by The Information, with concerns reportedly intensified by the underperformance of Call of Duty: Black Ops 6 and wider pressure on the gaming division.

The disclosure points to a moment of uncertainty inside one of gaming's most recognisable brands, even as Microsoft publicly pushes ahead with a refreshed strategy under Xbox leadership. While no formal process was launched and no buyers were approached, the fact the idea reached internal debate signals how sharply expectations have shifted.

Xbox has spent the past few years attempting to regain ground lost to PlayStation and the PC market. Despite high-profile acquisitions and repeated efforts to reposition Game Pass as a central pillar of its ecosystem, growth has not matched the scale Microsoft once appeared to anticipate. Leadership changes and restructuring have followed, with Xbox CEO Asha Sharma recently acknowledging that the division 'is not where it needs to be' and warning that further internal changes, including layoffs, are likely.

Microsoft Considered Selling Xbox Amid Strategic Reset

Microsoft reportedly weighed spinning Xbox into a separate entity, a move that could have opened the door to external investment or even a full sale. The discussions appear to have remained exploratory, without progressing to negotiations or outreach to potential buyers.

Even so, the timing is notable. The gaming industry is in the middle of a consolidation phase, with major media and investment groups deploying vast sums to secure valuable intellectual property and platforms. Had Xbox been formally put on the market, it is difficult to imagine a lack of interest.

Internally, however, the tone has shifted in recent weeks. Microsoft now appears to be backing Sharma's restructuring plan, which includes a renewed emphasis on first-party exclusives and hardware development. The upcoming next-generation console, known as Project Helix, is being positioned as a critical step in regaining competitiveness, with hints it may launch at a more accessible price point than its rivals.

That renewed focus comes with trade-offs. Sharma has been unusually direct about the need to confront underperformance, stating that repeating past strategies would not deliver different results. The implication is that Xbox's recovery will involve difficult decisions as well as new investment.

Microsoft Considered Selling Xbox as Call of Duty Faltered

One of the more striking elements, is the role attributed to Call of Duty, long regarded as one of the industry's most reliable commercial engines. Microsoft's acquisition of Activision Blizzard was expected to strengthen Xbox's position significantly, with the franchise seen as a cornerstone of Game Pass growth.

Instead, the integration appears to have produced mixed results. When Black Ops 6 was added to the subscription service, the report claims it 'cannibalised' both traditional sales and subscription value. Rather than driving sustained engagement, the move coincided with weaker-than-expected sales for recent entries and turbulence within Game Pass itself.

A price increase for the subscription service reportedly led to 'millions' of users leaving, raising questions about the balance between scale and profitability. The original plan to use Activision's revenues to offset Xbox's broader financial pressures did not fully materialise under those conditions.

Microsoft has since adjusted course. Call of Duty is expected to return to a more traditional release model, moving away from strategies that may have diluted its standalone value. The shift suggests a recognition that even the industry's biggest franchises are not immune to missteps when folded into broader platform strategies.

At the same time, there are signs of stabilisation. The restructuring has begun to recover some lost ground, and internal confidence appears to be improving, at least compared with the period when divestment was being discussed. New exclusive titles, including Gears of War: E-Day, are intended to reinforce Xbox's identity at a time when its brand has arguably become too diffuse.

Still, the episode leaves an impression that Xbox's position inside Microsoft is less settled than its public messaging might suggest. The willingness to even consider a spin-off underscores the pressure on the division to justify its place within a company whose core strengths lie elsewhere.

Whether the current strategy is enough to close the gap with competitors remains uncertain. What is clear is that Xbox is no longer operating with the margin for error it once enjoyed, and even its biggest assets, including Call of Duty, have not guaranteed stability.