Microsoft is fast-tracking development on new installments of The Elder Scrolls, Fallout, and Halo, according to reporting from The Information, even as the company explores a potential overhaul of its gaming division that could include spinning off Xbox as a separate entity.
Xbox CEO Asha Sharma has received approval from Microsoft leadership to increase spending on major game releases this fiscal year, with support from CEO Satya Nadella and CFO Amy Hood. The acceleration applies specifically to the three flagship franchises, though the company has not detailed which titles would benefit from the prioritized resources or offered any launch timeframes.
The restructuring discussions remain preliminary. Microsoft has not ruled out converting Xbox into a wholly owned subsidiary that could operate as a joint venture with external partners or potentially be sold, according to three sources cited by The Information. No imminent changes are planned, and how seriously the company is pursuing the option remains unclear. If pursued, the move would mirror the structure Microsoft already uses for subsidiaries like LinkedIn and GitHub.
The information surfaced amid turbulent weeks for Xbox. The division released major announcements at its Games Showcase 2026 event, unveiling new projects including Gears of War: E-Day, Fable, and Spyro: A Realm Beyond. But enthusiasm quickly faded when leaked artwork appeared to show Gears of War branding alongside a PlayStation 5 logo, fueling fan concerns about Xbox's commitment to exclusives.
The confusion compounded earlier announcements that Microsoft plans to reset its gaming operations and eliminate positions in July. The combination of accelerated development pushes, restructuring speculation, and workforce reductions has left the gaming community questioning the company's strategic direction.
The scope of the accelerated projects remains vague. Neither The Elder Scrolls 6 nor Fallout 5 has been formally announced, and Bethesda Softworks, the publisher owned by Microsoft, has never publicly committed to release windows for these mainline entries. The acceleration could involve spin-offs, remasters, or smaller projects within those universes instead. A Fallout 3 remaster has been rumored but not confirmed.
The budget increase could face revision. Sources told The Information that funding allocated for this fiscal year might be adjusted at any point.
Author Emily Chen: "Accelerating development on games you haven't even announced is classic corporate theater, especially when you're simultaneously laying off the people who'd make them."
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