Key Takeaways
- • According to a report from The Information, citing people familiar with the matter, several private equity firms explored acquiring Microsoft's Xbox gaming division at a valuation between $100 billion and $150 billion.
- • The discussions were exploratory, never progressed to formal negotiations, and did not result in an offer; the interested parties have not been identified.
- • Microsoft has maintained that Xbox is not for sale, with Xbox CEO Asha Sharma telling The New York Times in September that the division was not for sale.
- • The upper-end valuation is nearly three times the $55 billion paid for Electronic Arts, a transaction that was completed in August 2026.
- • Xbox FY2026 revenue fell 7% year-on-year to $21.79 billion, with hardware revenue down 29% and content and services down 5%.
Summary
A group of private equity firms reportedly explored acquiring Microsoft's Xbox gaming division for between $100 billion and $150 billion, according to a new report from The Information citing people familiar with the matter. The discussions, which took place in recent months, remained exploratory and never advanced to formal negotiations with Microsoft. The identities of the interested firms have not been disclosed, and it is unclear which assets would have been included in the proposed valuation.
The upper end of the reported range is nearly three times the $55 billion acquisition of Electronic Arts, a deal involving Saudi Arabia's Public Investment Fund, Silver Lake and Affinity Partners that was completed in August 2026. The reporting notes that an Xbox transaction would be considerably more complex, given Microsoft's ownership of major franchises including Call of Duty, Minecraft, Diablo and The Elder Scrolls, as well as its console business and Game Pass subscription service.
The report follows statements from Xbox CEO Asha Sharma, who told The New York Times in September that Xbox was not for sale, while acknowledging that the company would consider alternative partnerships and operating arrangements to improve performance. A separate Fortune investigation published the same day as The Information's report found that several current and former Microsoft employees believe Xbox may be prepared for a potential sale, spin-off or outside investment. Microsoft commercial chief Judson Althoff pushed back on that speculation, arguing the company would not have appointed one of its best executives to lead a business it intended to sell.
The division's financial position has weakened. According to Microsoft's FY2026 financial statements, Xbox generated $21.79 billion in revenue, down 7% year-on-year, with hardware revenue falling 29% and content and services revenue declining 5%. The division has also undergone a significant restructuring under new leadership, with three more rounds of layoffs reportedly scheduled.
There is no indication that Microsoft has received or entertained an acquisition proposal. The reported interest nonetheless suggests outside investors see substantial value in Xbox despite its recent declines, and whether Microsoft's restructuring leads to a change in ownership remains unresolved.
The upper end of the reported range is nearly three times the $55 billion acquisition of Electronic Arts, a deal involving Saudi Arabia's Public Investment Fund, Silver Lake and Affinity Partners that was completed in August 2026. The reporting notes that an Xbox transaction would be considerably more complex, given Microsoft's ownership of major franchises including Call of Duty, Minecraft, Diablo and The Elder Scrolls, as well as its console business and Game Pass subscription service.
The report follows statements from Xbox CEO Asha Sharma, who told The New York Times in September that Xbox was not for sale, while acknowledging that the company would consider alternative partnerships and operating arrangements to improve performance. A separate Fortune investigation published the same day as The Information's report found that several current and former Microsoft employees believe Xbox may be prepared for a potential sale, spin-off or outside investment. Microsoft commercial chief Judson Althoff pushed back on that speculation, arguing the company would not have appointed one of its best executives to lead a business it intended to sell.
The division's financial position has weakened. According to Microsoft's FY2026 financial statements, Xbox generated $21.79 billion in revenue, down 7% year-on-year, with hardware revenue falling 29% and content and services revenue declining 5%. The division has also undergone a significant restructuring under new leadership, with three more rounds of layoffs reportedly scheduled.
There is no indication that Microsoft has received or entertained an acquisition proposal. The reported interest nonetheless suggests outside investors see substantial value in Xbox despite its recent declines, and whether Microsoft's restructuring leads to a change in ownership remains unresolved.
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