Microsoft is exploring various future scenarios for its Xbox gaming division, including spinning it off as a separate company, restructuring it as a subsidiary, or forming a joint venture with other partners to make it easier to sell the gaming business in the future.
Microsoft is exploring various future scenarios for its Xbox gaming division, including spinning it off as a separate company, restructuring it as a subsidiary, or forming a joint venture with other partners to make it easier to sell the gaming business in the future.
Reuters reports this, citing sources from The Information, who are directly familiar with the internal discussions. According to insiders, the reorganization is not urgent, but absolutely all options for the development of events currently remain on the table with top management.
The Xbox brand has faced serious challenges in recent years. Microsoft’s focus on subscription and cloud gaming has failed to fully compensate for declining sales of physical consoles and a lack of big-name hit releases.
If the restructuring takes place under the scenario of creating a subsidiary, Xbox will operate on the model of the professional network LinkedIn or the developer platform GitHub, which are fully owned by Microsoft but have a high level of autonomy.
Meanwhile, the gaming division is preparing for a massive investment in content. Asha Sharma, who took over as head of gaming in February, plans to significantly increase spending to accelerate the development of new projects based on the company’s most successful franchises, including Halo, Fallout and The Elder Scrolls.
Microsoft CEO Satya Nadella and CFO Amy Hood have already approved Sharma’s plan to increase spending on AAA games for the next fiscal year, which begins in July. However, the final budget for the initiative is still being approved and could change depending on the direction Xbox takes in its restructuring.
Insiders previously claimed that the Xbox division was facing a wave of large-scale layoffs in July. This would be the first under new head Asha Sharma.
