Xbox (stylized in all caps), formerly Microsoft Gaming, is the video game and digital entertainment division of Microsoft, an American multinational technology company based in Redmond, Washington. Established in 2022, it produces the namesake video game consoles and services, in addition to overseeing production and sales. Its six development and publishing labels consist of: Xbox Game Studios, Mojang Studios, King, Bethesda Softworks (publishing label of ZeniMax Media), Activision and Blizzard Entertainment (publishing labels of Activision Blizzard).
Prior to 2022, Microsoft had several different video game-related product lines, including Xbox hardware, Xbox operations, and game development studios. Microsoft Gaming was created with the announcement of Microsoft's plans to acquire Activision Blizzard to unify all of Microsoft's gaming groups within a single division. With the completion of the Activision Blizzard acquisition in 2023, Microsoft became one of the largest gaming companies, the third-by revenue. The company employs approximately 14,000 people worldwide, making it one of the largest employers in the video game industry. The company has 100 million daily active players across all gaming platforms.
The division owns intellectual property for some of the most popular, best-selling, and highest-grossing media franchises of all time, including Call of Duty, Candy Crush, Warcraft, Halo, Minecraft, and The Elder Scrolls. Asha Sharma is the CEO of Xbox since 2026.
History Pre–Microsoft Gaming (2001–2021) Up through 2000, Microsoft had only a limited number of video game publishing efforts. With the announcement of the first Xbox in 2000 and its release in 2001, Microsoft established a division for internal development of video games for the Xbox and Windows, then known as Microsoft Game Studios (MGS). The Xbox hardware remained a separate division within Microsoft. After Steve Ballmer's departure as Microsoft's CEO, Microsoft investors attempted to exert pressure on the company to either sell or shut down its gaming business. However, these efforts did not gain significant traction. Microsoft's gaming division, including products such as the Xbox console, has remained a strategic focus for the company. Under the leadership of Satya Nadella, who assumed the role of CEO in 2014, Microsoft has continued to invest in and expand its presence in the gaming market. Since 2009, Microsoft's games operations, including Xbox division, are located at Microsoft West Campus.
MGS made a number of acquisitions of studios to help build out the Xbox software library over its first decade, including Bungie, Lionhead Studios, and Rare while establishing internal studios 343 Industries for Halo development and Turn 10 Studios for Forza games. In 2014 after Satya Nadella was promoted to CEO (combined with the ascension of Phil Spencer to head of Xbox), Microsoft embarked on a new acquisition strategy, starting with the acquisition of Mojang Studios, the developer of Minecraft, for $2.5 billion. Between 2014 and 2019, MGS also acquired several high-profile studios, including Ninja Theory, Playground Games, Obsidian Entertainment and inXile Entertainment. These acquisitions were aimed to help position MGS as the company's premier first-party development house comparable to PlayStation Studios for Sony.
Microsoft launched Xbox Game Pass in 2017, marking a pivotal year in which the company reevaluated its strategy to focus on a service-based business model rather than exclusive titles. This strategic shift allowed Microsoft to distinguish itself from other console manufacturers. By prioritizing a service-oriented business model with the Xbox Game Pass, Microsoft differentiated its approach from traditional console strategies that often relied heavily on exclusive game titles to attract users. Instead of competing solely based on exclusive content, Microsoft aimed to offer a broader value proposition to gamers through a subscription service that provided access to a vast library of games. In 2017, Spencer was named Executive Vice President, Gaming at Microsoft.
In 2019, as part of a larger branding, MGS was renamed to Xbox Game Studios (XGS) as to align with the Xbox hardware branding, and further acquired Double Fine. Microsoft acquired ZeniMax Media for $8.1 billion in 2020, the parent company of id Software, MachineGames, Arkane Studios, publisher Bethesda Softworks and others, to further expanding its portfolio of game development studios. ZeniMax remained a separate entity from XGS from its acquisition though overseen by Spencer.
Establishment and acquisition of Activision Blizzard (2022–2023)
Microsoft announced its proposed acquisition of Activision Blizzard for $68.7 billion in cash on January 18, 2022. Simultaneously, Microsoft announced that Xbox Game Studios, ZeniMax Media and Activision Blizzard would fall under Microsoft Gaming, Microsoft's newly formed gaming division. Microsoft Gaming CEO Phil Spencer stated that one of the primary reasons for acquiring Activision Blizzard is to enter the mobile gaming market. Meanwhile, Activision Blizzard CEO Bobby Kotick mentioned that they accepted the offer to access more talent, capitalize on the growing demand in the gaming industry, and to compete with rising gaming companies from China and Japan. Microsoft Gaming has entered into several 10-year agreements with gaming companies including Sony, Nintendo, Nvidia, Boosteroid, Ubitus, Nware, and EE, to bring Call of Duty to their respective platforms over the next decade. Additionally, Microsoft Gaming sold Activision Blizzard's cloud gaming rights to Ubisoft for 15 years due to regulatory pressure from the acquisition of Activision Blizzard. After several regulatory challenges, the deal was closed on October 13, 2023. The total cost of the acquisition amounted to $75.4 billion. This made Microsoft the third largest publisher of video games after Tencent and Sony Interactive Entertainment. On the day the acquisition was announced, Phil Spencer formed the Microsoft Gaming business, taking over as CEO, while Matt Booty headed Xbox Game Studios. Spencer's role includes all Microsoft's global interactive entertainment business across all devices and services. In 2022, ZeniMax Media, acquired Nemesys Games, a Hungarian video game development studio. Following the acquisition, Nemesys Games was officially renamed to ZeniMax Online Studios Hungary.
Shortly after completion of the Activision Blizzard acquisition, Microsoft further reorganized Microsoft Gaming. In this move, the Xbox hardware line was brought into Microsoft Gaming led by Sarah Bond. Matt Booty was made president of game content and studios, which includes oversight of Xbox Game Studios and ZeniMax Media, while Activision Blizzard also remained directly under Spencer, with Bobby Kotick remaining as CEO until the start of 2024 to help with the transition. In an email sent to employees, Bobby Kotick announced that he would leave the Activision Blizzard on December 29, 2023.
Following Bobby Kotick's departure, Activision Blizzard has undergone organizational changes to realign with Microsoft Gaming. Vice Chairman of Activision Blizzard, Thomas Tippl; President of Activision, Rob Kostich; President of Blizzard Entertainment, Mike Ybarra; and President of King, Tjodolf Sommestad, have begun reporting to Matt Booty, President of Game Content and Studios. The leadership teams at Activision, Blizzard Entertainment, and King remained unchanged. CCO Lulu Meservey departed Activision Blizzard on January 31, 2024. After assisting with the transition, Thomas Tippl, along with several other top Activision Blizzard executives, departed from the company in March 2024.
Microsoft Gaming laid off 1,900 staff (approximately 8% of its workforce) in January 2024. Additionally, Blizzard's president Mike Ybarra and Blizzard's co-founder and chief design officer Allen Adham left the company. Blizzard Entertainment reportedly is the organization that is most affected by layoffs. Project Odyssey, a game that Blizzard Entertainment has reportedly been working on for six years, has been cancelled. Toys for Bob and Sledgehammer Games reportedly lost over 30% of their staff due to layoffs. Microsoft Gaming also reportedly laid off the entire internal customer support team of Activision Blizzard and the team dedicated to bringing Xbox games to physical retail. Johanna Faries, the former general manager of the Call of Duty franchise, officially took on the role of the new president of Blizzard Entertainment on January 29, 2024, commencing her position on February 5. Simultaneously, Matt Cox assumed the position of the new general manager of the Call of Duty franchise. In February, Toys for Bob's office closed, and employees would work remotely.
Multiplatform strategy (2024–2025) Rumors in early February 2024 suggested that Microsoft was looking to bring its first-party exclusives to either PlayStation 5 or Nintendo Switch, and that Microsoft may be leaving the hardware business. A special Official Xbox Podcast was held on February 15, 2024 with Spencer, Bond, and Booty, discussing that Microsoft Gaming was looking to release some of its first-party titles on other consoles. Spencer said that one of the reasons for this decision is to grow the Microsoft Gaming franchises, and he anticipates that in the next 5–10 years, console-exclusive games would be a smaller part of the gaming industry. In the months that followed, Spencer said that the gaming industry was undergoing changes in the methods by which games were developed and distributed, and that Microsoft was prepared to anticipate when considering a more aggressive multiplatform strategy. By the end of 2024, Microsoft Gaming launched a new advertising campaign titled "This is an Xbox", intent on showcasing the various compatible devices that can access Xbox games and services beyond the traditional consoles, such as Windows PCs, Samsung Smart TV sets, and streaming devices like Amazon Fire TV through cloud streaming. Xbox Senior Marketing Director Craig McNary stated that the campaign's message was to illustrate "the evolution of Xbox as a platform that extends across devices," thus being evocative of a future where their games and content are accessible on a variety of hardware and software. Spencer also said that Microsoft Gaming would support the Nintendo Switch 2 following that console's announcement in January 2025.