Microsoft could face more pressure to sell Xbox after the November midterms, according to NYU Stern professor and SuperData co-founder Joost van Dreunen. His theory starts with local opposition to the data centers that power Microsoft’s AI expansion.
In a SuperJoost Playlist column titled “The Election That Could Break Up Xbox”, van Dreunen argues that tighter restrictions on data center construction could make Microsoft’s AI plans more expensive. That could force the company to take a harder look at how much it’s willing to invest in a gaming division that’s already struggling to grow.
How Data Center Politics Could Reach Xbox
As BigGo Finance noted, van Dreunen cited reporting from The Wall Street Journal on data center measures in more than 40 towns and counties. Voters in at least 10 of those communities approved bans or strict zoning restrictions. Several incoming Democratic state officials have also signaled plans to halt permits or withdraw tax incentives for large facilities.
An image from Halo: Campaign Evolved – Microsoft, XBOX Game Studios, Halo Studios
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With fewer places to build, Microsoft could face higher costs for its AI expansion. That could force Chairman and CEO Satya Nadella to make tougher choices about where to spend the company’s money. Xbox is already under pressure to return to growth, and Microsoft’s search and advertising business recently brought in more revenue than gaming.
Few voters weighing a data center ban had Xbox in mind. But van Dreunen argues that those local decisions could influence how much Microsoft is willing to invest in gaming.
Xbox Hardware Revenue Continues to Slide
Microsoft spent nearly $70 billion to acquire Activision Blizzard, but its gaming business has struggled in recent quarters. In the fiscal quarter ended June 30, gaming revenue fell 10% year over year. Xbox content and services revenue also fell 10%, while hardware revenue dropped 13%.
Overall gaming revenue fell 2% year over year in the quarter ended September 30. Hardware revenue continued to slide, dropping 14% from a year earlier.
In Q1, XBOX revenue declined 2% YoY, compared with a 10% decline a quarter ago, while our accountability margin improved. Minecraft and WoW Forever set records, Call of Duty had its most acclaimed release in more than a decade, and our PC platform revenue grew double digits. Console sales remain constrained by supply, with more demand than consoles available. We’re working to get more consoles into players’ hands, including through our expanded refurbishment program. We’re making progress, with a lot more work ahead.
— ASHA (@asha_shar) October 28, 2026
Xbox CEO Asha Sharma, who took over earlier this year, has pointed to supply chain problems as one factor in weaker console sales. In a July memo to staff obtained by The Verge, Sharma set a goal of returning Xbox to player and revenue growth by the end of June 2027.
Private Equity and the $150 Billion Question
In October, The Information reported that a group of private equity firms had explored a potential buyout that would value Microsoft’s gaming assets at $100 billion to $150 billion, according to Wccftech. Microsoft responded with a blunt denial. “Xbox is not for sale.”
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Also in October, Xbox announced a new division called XP to oversee its work in film and television, merchandise, live events, and theme park attractions. Former Lucasfilm executive Kayleen Walters leads the division, which brings together efforts ranging from A Minecraft Movie to BlizzCon.
Van Dreunen sees XP as a potential selling point. A buyer interested in Xbox’s franchises could use the division to bring more of those properties to theaters, stores, and theme parks. How much that buyer would want to spend on another generation of consoles is a separate question.
What a Sale Could Mean for Xbox Players
What changes for players would depend on who bought Xbox and which parts of the business came with it. A buyer could revisit Game Pass pricing or reconsider which major releases land on the service on day one. It could also shift more resources toward publishing games on PlayStation, Nintendo, and PC.
The Game Pass logo – Microsoft, XBOX
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For players who have spent years building digital libraries, the first question may be simpler. Could they still download and play the games they already bought? Continued access to purchases, backward compatibility, and cloud gaming would depend on how a deal handled the Xbox storefront, licensing agreements, and online services.
For now, the clearest milestone is Sharma’s June 2027 growth target. The next few quarters should give players a better sense of whether Xbox can turn its gaming business around as Microsoft expands its AI infrastructure.
Do you think Microsoft will sell Xbox? Sound off and let us know!
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