Report: Private equity firms considered $150bn Xbox buyout

• Microsoft says Xbox is not for sale.
• The potential deal would exceed the $55bn leveraged buyout of Electronic Arts.
• Xbox revenue fell by 7% to $21.8bn, while its adjusted profit margin dropped to 3%.

A group of private equity firms reportedly explored buying Microsoft's Xbox gaming division in a deal that could have valued the business at between $100 billion and $150bn.

As reported by The Information, the talks were exploratory and did not lead to negotiations with Microsoft. A Microsoft spokesperson said in a statement that “Xbox is not for sale”.

The discussions came amid Microsoft's continued efforts to turn around its gaming business, which includes Activision Blizzard since the 2023 acquisition. The Xbox division employs around 14,000 people and has struggled with declining sales and thin profit margins.

Revenue under pressure

Xbox revenue fell 7% to $21.8bn in the fiscal year ending in June. Its adjusted profit margin also fell to 3% as of June, according to figures disclosed by Microsoft.

Since taking over the division in February, CEO Asha Sharma has focused on improving operations and growth. In July, she outlined plans to cut 3,200 jobs, around 20% of staff, over the next year while investing more in franchises such as Halo and Minecraft.

Microsoft has also considered spinning out Xbox or restructuring it as a wholly owned subsidiary, according to earlier reporting. However, the company has continued to focus on improving the division with new Xbox initiatives. 

Earlier this month, the company introduced Xbox Labs, a group exploring new gaming technology. XP was also announced as a division focused on expanding franchises through film, television, merchandise and live experiences. 

The company has appointed Kayleen Walters to lead XP and Maria Angelidou-Smith as CEO of Mojang and Minecraft as it looks to grow its major franchises and find new ways to reach audiences.