Microsoft Corporation (NASDAQ:MSFT)’s new CEO Satya Nadella hinted that Xbox might be taking its last breath (as part of MSFT) as he sees the company in a “software-powered world” a “mobile and cloud-first world,” which means that the company would be less involved in the gaming system or making hardware, says Sascha Segan from PC Mag.
Microsoft Xbox may be formed into a separate company
However, the news does not come as a surprise because Xbox is not on his priority list. Nadella is more focused on software rather than hardware. He is concerned about delivering the devices and services that are useful for every individual and organization, as well as platforms and ecosystem that create wider opportunity.
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“…devices and services that truly empower every individual and every organization…platforms and ecosystems that create broad opportunity,” Nadella wrote in his first letter to Microsoft staffers.
Nadella said that Xbox is a good business and a profitable one, and the company is not planning to shut it down any time soon. Rather, the business might be spun off to become an independent company with close association with Microsoft Corporation (NASDAQ:MSFT), however, not under the direct control of Nadella.
What in store for Mobile, Surface and other hardware businesses?
Xbox is a successful business segment for Microsoft Corporation (NASDAQ:MSFT), but according to Nadella it does not have a core competency. On the other hand, mobile businesses are not very successful, but are one of the key factors for the future of the company. Nadella will thus stick with Surface and Nokia until he can figure out a structure where Microsoft can succeed in mobile.
Microsoft Corporation (NASDAQ:MSFT) wants to hold on Surface tablet until other Windows partners do not succeed, believes the author. Intel’s Bay Trail chipset may boost the demand for Windows 8.1, which might help solve the problem. If Asus, HP, Dell and others can gain some momentum next year, then probably Microsoft would consider selling its Surface business to one of those firms.
Apart from the Xbox, the new CEO is also considering shutting down MSFT operations involving the keyboard, mouse and all sorts of things. Nadella feels that this segment makes money, but distract his focus.
Nadella wants to transform the organization into a platform company. Microsoft Corporation (NASDAQ:MSFT) was adopting Apple Inc. (NASDAQ:AAPL)’s approach by offering Xbox, Surface and the acquisition of Nokia, but it appears Nadella wants transform the company into something more like Google Inc (NASDAQ:GOOG).