<div id="readability-page-1"><p id="p-rc_5f22c27c92919b78-46">Microsoft (MSFT) has been insisting that &#34;Xbox is not for sale,&#34; despite a recent drop in Xbox hardware sales and major job cuts within its gaming division. While gaming was once a key part of the company's growth story, Microsoft is now changing its focus toward artificial intelligence.</p><h3>4th of July Sale - 70% Off</h3><ul><li> Unlock powerful  investing tools and data-driven insights with TipRanks Premium for more confident investment decisions.</li><li> Discover top stock picks and new investment opportunities through TipRanks' Smart Investor Newsletter.</li></ul> <p id="p-rc_5f22c27c92919b78-47">Many Wall Street analysts believe the company should look into selling or spinning off the unit to better protect its stock price. They view the current Xbox situation as an unnecessary distraction from more profitable projects.</p> <h2><strong>Xbox CEO Cuts 3,200 Gaming Jobs</strong></h2> <p id="p-rc_5f22c27c92919b78-48">The new CEO of Xbox, Asha Sharma, recently made an announcement regarding the health of the business. In a letter sent to employees, Sharma confessed that &#34;our business today is not healthy&#34; and revealed that the unit operates at very low profit margins. To fix these financial problems, she began implementing a strict plan to restructure the division.</p> <p id="p-rc_5f22c27c92919b78-49">As part of this overhaul, Xbox will eliminate 3,200 jobs over the next Fiscal year. The reduction started immediately with 1,600 workers losing their jobs on Monday. Following this news, Microsoft stock dropped by 1% as investors reacted to the growing troubles in the gaming unit.</p> <h2><strong>D.A. Davidson Analyst Questions the Long-Term Strategy</strong></h2> <p id="p-rc_5f22c27c92919b78-50">Market experts believe that keeping the video game division no longer makes financial sense for the parent company. Gil Luria, an analyst at D.A. Davidson, stated that gaming has become &#34;a very, very marginal piece of Microsoft's growth strategy, if it's a piece at all&#34;. He noted that the business currently hurts the firm's overall stock performance.</p> <p id="p-rc_5f22c27c92919b78-51">Luria argues that the best move for leadership is to completely eliminate parts of the company that lower total profit margins.<sup></sup> He explains that while Xbox is a decent business, it does not fit well in public stock markets or within the broader corporate goals.<sup></sup> He believes a sale to private equity firms could eventually become a realistic option if the business improves enough.<sup></sup></p> <h2><strong>Analyst Explains the Subscription Failure</strong></h2> <p id="p-rc_5f22c27c92919b78-52">The current problems represent a big shift from a few years ago, when the company spent billions of dollars to expand its gaming footprint. Microsoft completed a major $70 billion purchase of Activision Blizzard to acquire popular titles like Call of Duty.</p> <p id="p-rc_5f22c27c92919b78-53">Nick McKay, a 5-star analyst at Freedom Capital Markets, explained that the company wanted to use these popular games to drive people to its Game Pass subscription. The ultimate goal was to turn the service into &#34;the Netflix of videogames over time&#34;. However, McKay noted that &#34;that just didn't happen&#34;. Instead of growing, hardware revenue plummeted 33% last quarter, forcing the company to look for extra capital to fund its artificial intelligence projects.</p> <h2><strong>Is Microsoft Stock a Buy, Sell, or Hold?</strong></h2> <p>Turning to the Street, Microsoft has a Strong Buy consensus, based on 37 analysts issuing ratings in the past three months. This is based on 36 Buys and one Hold rating. The average 12-month MSFT stock price target is $563.62, implying about 45% upside from the current price. (See <strong>MSFT stock forecast</strong>)</p></div>

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<p>Microsoft insists Xbox is not for sale despite hardware sales drops and 3,200 job cuts in its gaming division. CEO Asha Sharma cited unhealthy business margins, prompting restructuring. Analysts argue the unit distracts from profitable AI projects and suggest a spin-off or sale to private equity could boost stock performance. Despite a 33% drop in hardware revenue, Microsoft maintains a 'Strong Buy' consensus with an average price target of $563.62.</p>

- Microsoft has declared that "Xbox is not for sale" despite recent declines in Xbox hardware sales and job cuts within its gaming division.  
- Xbox CEO Asha Sharma announced plans to restructure the division after admitting the unit operates at low profit margins, resulting in 3,200 job reductions.  
- Analysts suggest that selling or spinning off the gaming unit may better protect Microsoft's stock price, as gaming has become a marginal part of the company's growth strategy.

Microsoft Insists "Xbox Is Not for Sale" Despite Dropping Hardware Sales