Microsoft is exploring options to restructure Xbox, including making it a wholly owned subsidiary, forming a joint venture, or possibly selling the division in the future. No immediate decisions have been made, with all options still under formal discussion, according to multiple sources [1, 2, 3, 4, 5, 6, 7, 8].
Xbox CEO Asha Sharma is pushing to accelerate production on major Xbox franchises such as Halo, Fallout, and The Elder Scrolls as part of a business reset. This includes increased spending on top-tier Xbox game development starting in the fiscal year that begins July 2026, a move approved by Microsoft CEO Satya Nadella and CFO Amy Hood [1, 2, 3, 5, 6, 7, 8].
The Elder Scrolls 6 remains in active development and is internally playable, though it is still far from release or public announcement. Bethesda director Todd Howard confirmed in March 2026 that the majority of the studio is focused on the game, but there is no confirmed launch date [9, 10, 11]. Xbox Chief Content Officer Matt Booty said, "I can tell you, having visited Bethesda and sat with Todd and seen Elder Scrolls playing, it looks amazing, and it’s coming along well. And we’ll make sure to announce it and really reveal it at the right time" [9]. Booty also noted the difficulty of balancing excitement and timing for public reveals [10].
Starting in July 2026, Xbox plans large-scale layoffs and cuts to marketing budgets amid financial challenges and overextended studios, sources report. Several Xbox-owned studios are reportedly negotiating spin-offs or independence to avoid closure during the restructuring [1, 2, 12, 5].
Despite these changes, Xbox will continue focusing on console exclusives and core franchises like Gears of War, Halo, Fallout, and The Elder Scrolls [9, 1, 2, 5].
The Elder Scrolls 6 was announced with a teaser trailer at Bethesda’s E3 event in June 2018, marking 8 years since its reveal [10, 11]. Xbox will mark its 25th anniversary in November 2026 [9].
