This week, Microsoft took a huge ax to its Xbox business. The company announced that it would be laying off 1,600 workers now, 1,600 more over the next fiscal year, and that it would be shedding four studios. Xbox CEO Asha Sharma hasn’t been shy about why she’s making such dramatic cuts, saying in a memo that the business is “not healthy.” Speaking to Fortune, she said that “we simply spread ourselves too thin.”

Given the scale of the changes and Xbox’s currently vague strategy of focusing only on big games, it’s unclear just what the future of the platform is. As Microsoft invests much of its resources into everything AI, a struggling consumer business with a difficult future doesn’t necessarily seem like a good fit for the company. Which opens up the possibility that Microsoft could be preparing to eventually exit the gaming business altogether by selling off Xbox. This, in turn, raises an even bigger question: Who could possibly buy Xbox?

While nothing has been confirmed, Microsoft’s recent moves make selling off the brand seem like a possible option, as New York University professor Joost van Dreunen tells The Verge. “A wholesale divestiture of Xbox remains on the table, and it looks likelier given Xbox’s struggles with rising hardware costs and Microsoft’s focus on AI and infrastructure,” he explains. “It’s never been clear what role Xbox plays in Microsoft’s flywheel.” But a full sale is the “less likely path,” van Dreunen says. Few buyers, even giants like Netflix, Amazon, Tencent, or a sovereign wealth fund that could theoretically afford the business, would want “an entire interactive-entertainment conglomerate running north of $23 billion in annual revenue.”

Despite the cuts, Microsoft still has a lot under the Xbox umbrella. It operates a hardware business that sells (increasingly expensive) Xbox Series X / S consoles, and one of the first things Sharma did was tease Xbox’s next-generation console, codenamed Project Helix. It still operates a massive roster of game developers: Halo Studios (which works on Halo), Bethesda Game Studios (Fallout, The Elder Scrolls), Mojang Studios (Minecraft), Call of Duty studios like Infinity Ward and Treyarch, The Coalition (Gears of War), Playground Games (Forza Horizon, Fable), Blizzard Entertainment (Overwatch, Warcraft), King (Candy Crush), and Rare (Sea of Thieves). (Kotaku has a great list of the current state of Xbox’s studios, if you want a refresher.)

Yoshio Osaki, president and CEO of market research firm IDG Intelligence, tells The Verge that “I think all options are on the table, considering the drastic measures already put in place to try and restructure the business at both a cyclical and structural level.” Osaki notes that in “earlier years,” it may have been possible for a company like Tencent to explore a wholesale purchase, “since the Western market, especially console, has been more elusive for them.”

But nowadays, Tencent seems to be stepping back from the space, as it’s reportedly looking to negotiate exits from many game investments in Japan. That move follows other reported pullbacks from groups that had been known for sweeping investments in games, including Chinese internet giant NetEase and the Saudi government-funded Savvy Games Group. As for another large tech company taking Xbox over, that seems unlikely; Osaki points to Meta seemingly divesting out of games following its recent metaverse layoffs and VR studio closures, while Amazon is focused more on its Luna cloud gaming service and using games to highlight other properties it’s building around, like James Bond and Tomb Raider.

Entertainment companies like Netflix and Disney could also be potential buyers, but their gaming strategies have generally “veered away” from major mergers and acquisitions in recent years, Osaki notes. Netflix, for example, has had a presence in games for years, but it has let go of many prestige indie titles in its mobile catalog and a AAA studio that never released a game in favor of TV games players can control with a smartphone. While some of Xbox’s more approachable fare, like Candy Crush or Minecraft, could fit at Netflix, it seems unlikely that something like Halo or The Elder Scrolls would translate well to a TV party game.

We don’t know what Microsoft’s asking price for Xbox would be. But likely part of the reason it would have few potential suitors is that, if we look at other recent gaming megadeals, the price would be prohibitively high. EA’s take-private deal values the company at $55 billion. Microsoft acquired Activision Blizzard in a $68.7 billion deal. The entirety of Xbox, inclusive of things like its franchises, studios, and hardware business, would cost significantly more.

Van Dreunen says that the more likely scenario is that big players might go after “specific pieces” of the Xbox business. Osaki similarly notes that it’s possible that “individual studios, IPs, and teams are sold or spun off piecemeal.” Microsoft has already shown that it’s willing to do that; it allowed Compulsion Games and Double Fine Productions to go indie, while Ninja Theory and Undead Labs have been sold to unspecified buyers.

Sharma hasn’t even been in her role for six months, so it might be a while before we see the full ramifications of her decisions. Many of the remaining studios are focused on household names like Halo, Call of Duty, Warcraft, Minecraft, and Candy Crush, signaling that Xbox is zeroing in on big properties. Sharma is also elevating Mojang and King by having them report directly to her, saying that the studios “have increasingly become platforms and are our largest by monthly active players.” Minecraft could be a preview of Xbox’s model ahead; Sharma believes Microsoft has massively underinvested in the game, according to Game File, and she has appointed Helen Chiang, formerly corporate VP of the Minecraft franchise, to be Xbox’s first COO.

Opinions vary on when we’ll get a clearer view of Xbox’s future. Osaki thinks it’ll be by “year end,” while van Dreunen says that it could be “within 24 months.” But what is clear is that, whatever fate awaits Microsoft’s gaming division, the changes at Xbox are far from over. “As Microsoft looks to free up cash for its AI build-out,” van Dreunen notes, “scaling Xbox back, or selling off parts of it, starts to look worth it.”