Reports have emerged that private equity firms explored acquiring Microsoft's (MS) gaming business, Xbox. In particular, the discussed valuation reached $100 billion to $150 billion (approx. 133 trillion to 199 trillion won). This figure far exceeds the $55 billion deal for EA, which transitioned to private equity ownership this year.
On the 20th local time, U.S. tech media outlet The Information reported that several private equity firms had explored jointly acquiring Xbox in recent months. However, the review ended at a brief exploratory stage and did not lead to actual negotiations with MS.
Had it materialized, it would have been the largest transaction in gaming history. The figure far surpasses the $68.7 billion (approx. 91 trillion won) MS spent to acquire Activision Blizzard, with the upper limit of $150 billion matching the total market capitalization of Sony Group. However, MS drew the line. A MS spokesperson told The Information that "Xbox is not for sale" and declined to comment further. Xbox CEO Asha Sharma made similar remarks in an interview with The New York Times (NYT) on the 30th of last month, while leaving open the possibility of considering appropriate partnerships and operating models.
The persistent rumors of a sale stem from financial performance. Xbox's revenue for fiscal year 2026 reached just $21.8 billion, a 7% decrease from the previous year. Hardware revenue dropped by 29%, and profit margins remained around 3%. Xbox plans to cut 3,200 jobs out of its total workforce of approximately 14,000 within a year.
Previously, The Information reported in June that MS had considered a spinoff of Xbox, restructuring it as a wholly owned subsidiary, or forming a joint venture. In an interview with Sharma published by Fortune on the same day as the latest report, Judson Althoff, who heads MS's commercial division, denied the sale rumors, stating that they wouldn't have put her on a business they intended to sell.
There is already a precedent for a private equity acquisition. EA was acquired for $55 billion including debt by Saudi Arabia's Public Investment Fund (PIF), Silver Lake, and Affinity Partners, going private in August. Since then, it has taken on approximately $18 billion (approx. 24 trillion won) in debt and reportedly informed bond investors of plans to cut annual expenses by $700 million (approx. 929 billion won). Some viewed this as a signal for large-scale layoffs.
From the users' perspective, financial burdens are growing regardless of whether a sale happens. Fortune reported that the internal estimated price for the next-generation device, 'Project Helix,' is between $1,200 and $1,800 (approx. 1.59 million to 2.39 million won). It is also reported that a plan to reshape Game Pass into an à la carte structure based on features is being considered.
It remains unknown which private equity firms explored the acquisition.
