"It has come to my attention that at Xbox-hosted events at GDC this past week, we represented Xbox and Microsoft in a way that was absolutely not consistent or aligned to our values," Microsoft's head of Xbox Phil Spencer said in a statement.
"That was unequivocally wrong and will not be tolerated," Spencer said.
Photos purportedly from the party surfaced on Twitter and Instagram, with many users expressing their anger at Microsoft's actions.
"I like dancing, I like talking to devs. But not at this #GDC16 party. Thanks for pushing me out of this party, Microsoft," Tin Man Games editor Kamina Vincent tweeted.
Microsoft had hosted a "Women in Gaming" luncheon at the GDC earlier that day.
Spencer added that the matter would be dealt with internally.
Technology companies been facing intense scrutiny over diversity and compensation equity issues.
Many big firms say there is a dearth of qualified women to hire, but many critics say the firms are not doing enough to attract and retain women.
© Thomson Reuters 2016