Microsoft reportedly weighing Xbox spin-off amid bigger game budgets

It seems Microsoft is pushing its Xbox gaming division and its armada of studios, including Bethesda Game Studios, Saber Interactive, and 343 Industries, to double down on its flagship gaming franchises while keeping structural options open for the company.

According to new reports, Microsoft is trying to accelerate the development of upcoming titles such as The Elder Scrolls VI, the rumored Fallout 3 Remastered, a Fallout: New Vegas remake, Halo: Campaign Evolved, and a rumored Halo multiplayer live-service title.

According to The Information, three people with direct knowledge told the outlet that Microsoft might be considering turning Xbox into a standalone company and restructuring it as a separate subsidiary, similar to how it owns other companies. For the record, Microsoft owns GitHub and LinkedIn.

The company is also reportedly brainstorming a joint venture with external partners to facilitate a potential future sale. However, there is no indication that a restructuring is imminent, and Microsoft is merely exploring the options it has on the table.

Meanwhile, Xbox’s new boss, Asha Sharma, proposed an increase in budgets for high-profile IPs, which was recently approved by Microsoft CEO Satya Nadella and the company’s CFO, Amy Hood, for the fiscal year starting in July. However, no specifics about the exact budget or figures have been revealed so far.

The reason behind the extra budget allowance is clear. Xbox wants to release more games more quickly, as many of its major IPs have been stagnating for more than a decade.

To put things into perspective, Bethesda’s Fallout 4 released nearly 11 years ago, while The Elder Scrolls V: Skyrim came out 15 years ago. The last trailer for The Elder Scrolls VI was an announcement teaser revealed eight years ago. As of now, Asha Sharma is focused on Fallout and The Elder Scrolls VI.

Halo has had its fair share of ups and downs, especially after the company slowed down Halo Infinite’s live-service support in 2025. Meanwhile, Square Enix has managed to release the Final Fantasy VII Remake Trilogy in less than a decade.

The formula seems simple: create video games under the banner of the biggest blockbuster franchises. However, simply throwing money at the problem may not fix Microsoft’s quality issues; developers still need time to breathe and avoid crunch in order to create valuable, worthwhile games.