Private equity firms considered buying Microsoft’s Xbox business in a deal worth more than $100 billion, The Information reports. The word that matters is “weighed.” Nothing in the report says a deal was signed or is even being negotiated. Still, the idea that buyout firms ran the numbers on carving Xbox out of Microsoft tells you a lot about where Big Tech’s priorities sit in 2026.
The report is light on public detail, and the firms involved haven’t been named in what’s available. So the size of the number and the timing deserve the most attention.
⚡ The Quick Read
- What: Private equity firms discussed acquiring Xbox, Microsoft’s gaming division, according to The Information.
- How big: The valuation discussed was north of $100 billion. That would make it one of the largest leveraged buyouts ever attempted.
- Status: It was an evaluation, not an announced transaction. There’s no sign Microsoft agreed to sell.
- Why it matters: It shows outside investors think Xbox could be worth more on its own, while Microsoft puts its money and attention into AI.
🎮 How Xbox Got This Big
A $100 billion price only makes sense once you remember how much Microsoft has spent building Xbox into a giant. It bought ZeniMax, Bethesda’s parent company, for $7.5 billion in 2021. Then it closed the $68.7 billion acquisition of Activision Blizzard, home of Call of Duty, World of Warcraft and Candy Crush.
That purchase turned Xbox from a console brand into one of the biggest game publishers in the world. It also makes the $100 billion-plus figure easier to understand. A buyer wouldn’t just be paying for a plastic box under your TV. It would be buying some of the most valuable franchises in entertainment, plus the Game Pass subscription business.
The Information has also reported that around 2021, Microsoft seriously debated whether to double down on gaming or wind it down. The company chose to double down. A buyout discussion suggests that question never fully went away.
🤖 Why This Is an AI Story
This is significant because of what Microsoft is spending money on. The company is pouring tens of billions of dollars a year into data centers, chips and AI infrastructure to keep up in the AI race. Every division gets judged against that bar.
Gaming doesn’t fit cleanly into that story. Console hardware is a low-margin business, and Xbox has spent the past couple of years cutting staff, raising prices and putting its games on rival platforms like PlayStation. For a company betting its future on AI, a $100 billion-plus cash payout could fund a lot of GPUs.
What stands out here is the pattern. Tech giants are going through their portfolios and asking which businesses actually support the AI strategy. Units that don’t are starting to look like assets to sell or spin off.
💰 Why Private Equity Would Want It
Buyout firms like businesses with steady recurring revenue, strong brands and room for cost cuts. Xbox has all three:
- Recurring revenue from Game Pass subscriptions
- Evergreen franchises like Call of Duty, Minecraft and Candy Crush
- Cost levers across a large, sprawling organization
The catch is size. Financing a deal above $100 billion would almost certainly take a group of firms working together, plus huge amounts of debt. Deals that big are rare, and they get hard to finish when interest rates and regulators push back.
🔭 What to Watch
- Microsoft’s response. Expect a denial or a “no comment.” Pay attention to how firmly the company commits to keeping gaming.
- More restructuring signals. Further layoffs, studio sales or a bigger push to put Xbox games on other platforms would all fit a business being made ready for a sale.
- The broader trend. If Xbox can be seriously discussed as a sale, other non-AI divisions at Big Tech companies are probably getting the same treatment.
For now, it’s a trial balloon, not a transaction. But it shows how hard AI spending is pushing even the world’s richest companies to rethink what they own. You can find more details in The Information’s original report.