Spin off the Xbox? Not so fast.


Without Microsoft, the Xbox could be very different. They might get a more appealing shade of green, though. (Photo by Timothy Clary/AFP/Getty Images)

Now that Microsoft officially has a new chief executive, there's a lot of speculation about the future of the company and, in particular, the future of the Xbox.

Top investors in the company have called, loudly, for Nadella to sharpen Microsoft's focus by slicing off the Xbox division. They'd also like to nix the other consumer product divisions -- such as the Surface, Bing and even the newly-acquired Nokia.

One thing is pretty clear: If the Xbox did spin loose from the mothership, it would not be good for the Xbox. Without Microsoft the Xbox is valuable as a brand, but less so as an actual service.

The console has a large community and, presumably, would keep its good in-game communication and multiplayer platform. But it loses all of the extra stuff Microsoft has been so diligently pushing about the third generation of the console since it was first confirmed last May.

How bad it would be, of course, depends on who might pick up the company and how much control Microsoft would still have over the services on the console. Microsoft could license the Xbox services to another firm, but it would have to be one that's only interested in making the hardware and not providing its own content -- an increasingly rare breed of company these days.

Which raises another question: Who would pick it up? Or rather, who would pick it up that Microsoft would be willing to sell to?

Sony might want to buy Xbox to eliminate its main competitor, but chances are Microsoft wouldn't sell to them at any price. The same is true for Google, Amazon or Apple, which have all been rumored to be working on a game service or console but have their own bitter rivalries with Microsoft on one front or another.

Microsoft has diligently negotiated all of those vital entertainment contracts that make the Xbox One, in particular, the super-connected media hub that it is. It's loaded the console with  Microsoft-tastic bells and whistles, such as Skype and SkyDrive  (er, OneDrive), in aiming to unify its "devices and services."  Would Microsoft really be willing to give up those assets to any of its top competitors?

And what about all of the game developers on its payroll? There's no doubt that Microsoft's in-house games are a cornerstone of its success. Anyone who disagrees has a little franchise called "Halo" to contend with on that point. But not everyone can spin off into their own studio, and that's a lot of talent for Microsoft to give up.

Of course, there's no point in starting the hand-wringing in earnest unless Microsoft actually cuts away the Xbox division. And so far, management has shown no sign of doing so.

Skeptics of this plan note the Xbox is pretty much the most successful product that Microsoft has introduced in the past decade. But proponents say Microsoft should let the division go exactly because it's successful -- it's a division that would do well on its own and allow the firm to focus more closely on its strength in serving business customers.

Thus far, it's hard to read what's in the cards from Microsoft's new CEO, Satya Nadella. He is a cloud and enterprise veteran without a lot of experience with consumer products. And he wasn't shy about saying his focus for the company is on software -- leaving Microsoft's hardware division ever so slightly out in the cold.

On the flip side, Phil Spencer, the corporate vice president of Microsoft Studios, said that Nadella is a  "good supporter of Studios and Xbox."

For now, it seems, we'll just have to stay tuned.

Hayley Tsukayama covers consumer technology for The Washington Post.
Comments
Show Comments
Most Read Business
Next Story
Brian Fung · February 7