Despite a few hurdles along the way Microsoft’s Xbox has actually come into its own recently. After years of operating in the red, the division has actually started to turn the profit that was planned for all along thanks to the success of the Xbox 360 and the recent launch of the Xbox One. However, according to The Street’s market analyst Jack Mohr, Microsoft will spin-off and sell their Xbox division some time in 2015. This might seem like a crazy notion to some, but Mohr attempts to back it up with a few facts that he feels point to the impending sale.
Microsoft is a computing, not a gaming company, and a sale of Xbox will leave the company flush with cash
First up is the fact that Microsoft recently shifted leadership with the new CEO, Satya Nadella, coming in to turn around operations. Nadella, as Mohr claims, is a “methodical innovator with a long-term bent”. This offers an opening for more out there predictions as no one truly knows how the new leader will chart the future of the company. According to Mohr, Nadella will spearhead the spin-off in order to generate cash for Microsoft investors. This will be both a short and long-term benefit as the company can then reinvest that cash into other operations. However, it would come at the cost of the entire Xbox division, which has shown itself to be a great benefit to Microsoft as a whole. Past comments from Nadella suggest that he is unwilling to sell the Xbox Division, with him saying ““I have no intent to do anything with Xbox other than what we’re doing today” last May. This came as a response to Microsoft founder Bill Gates saying that he would completely support Nadella if he wished to spin-off the Xbox division though.
As far as why Microsoft would sell Xbox off, Mohr goes on to say that “Microsoft is a computing, not a gaming company”. Indeed, this was a common statement back in the early 2000’s when Microsoft first introduced the Xbox and struggled to gain a foothold in the home console market. However, after over a decade in the market it does seem like a stretch. Furthermore, Microsoft has branched out significantly in recent year, with their own line of phones and tablets that run their Windows software.
Of course this is simply one analyst’s prediction for the future, which means little in the long run. However, it is a common prediction these days as Xbox becomes more and more of its own division within Microsoft, and looks to be a profitable enough property to stand on its own. It is just another sign of how far Xbox has come from its beginnings when it struggled to market itself to gamers who knew Microsoft as simply a “computing company”.
- This article was updated on:March 7th, 2018