- Microsoft could soon consider selling Xbox following the Democrats' victory in the 2026 US midterm elections.
- Analyst Joost van Dreunen believes growing opposition to data centers could threaten Microsoft's AI expansion plans.
- He believes Microsoft's declining Xbox revenue could push the company to sell the division to fund its AI ambitions.
The Democrats have won control of both the House and Senate in the 2026 US midterm elections, marking a major political shift that could also affect Xbox. Gaming industry analyst Joost van Dreunen believes the US election results could push Microsoft to sell its gaming division, despite Xbox CEO Asha Sharma recently stating that Xbox is not for sale.
In the analyst’s November 5 Substack post, Van Dreunen points to growing voter opposition to data centers, with a recent Wall Street Journal report saying that more than 40 towns and counties discussed measures to limit data center construction, with at least 10 voting to restrict or ban new projects. For Microsoft, which is heavily invested in AI, this isn’t good news.
Microsoft’s growing focus on AI and data center expansion also played a part in the “XBOX Reset” in July 2026, which saw the company cut more than 3,000 jobs and make major changes across its gaming division. Furthermore, while PlayStation continues to grow its gaming revenue, Xbox is lagging behind Microsoft’s other business divisions.
Xbox generated $5.4 billion in revenue in the previous quarter of 2026, which includes Xbox Game Pass and other services, down 2% from the same period last year. Meanwhile, Microsoft’s Search and Advertising division grew from $5.9 billion to $6.6 billion, highlighting the gap between Xbox and the company’s other businesses.
Van Dreunen believes Microsoft could sell Xbox to free up resources and, mainly, revenue for its AI ambitions. He also argues that CEO Asha Sharma’s announcement of Xbox XP, a division focused on turning gaming IPs into films and TV shows, could make the brand more appealing to potential buyers, since it showcases Xbox as a more traditional entertainment company.
Asha Sharma also recently announced Xbox Labs, an experimental R&D unit exploring AI-powered game development. So, with Democrats now controlling both chambers of Congress, Van Dreunen believes Microsoft’s AI ambitions could make an Xbox sale a more serious possibility. That said, do you think Microsoft will sell Xbox after the US election results? Let us know.
Shubham Chaurasia
