Microsoft could essentially establish a new Xbox subsidiary, Khan said. There is an alternative scenario, however, which could satisfy investors and benefit Microsoft. I think they are committed for at least the next few years." But I don't see that happening anytime soon assuming they go ahead and launch the Xbox One. My thought is they would have trouble coming to terms with a potential buyer and more likely just exit the game business entirely.
#Microsoft xbox games division software
It is simply too unwieldy to try and sell an entire game system hardware and software business. "I think the possibility of them selling to another company is unlikely. Meanwhile other Microsoft consumer forays have not done as well as Xbox," he said. Now Microsoft has to start from scratch with a new game system that could be a drag on earnings. The Xbox has been a success from a consumer perspective but not so much financially. "Microsoft's forays into more consumer oriented products have generally been seen as a drag on the rest of its business. In fact, Cole thinks Microsoft would be better off just exiting the games business than to try and sell the Xbox division. While some investors may like the idea of spinning off Xbox, at this point Microsoft is just too committed, noted DFC Intelligence's David Cole.
This goodwill should not be discounted as immaterial, and I sincerely doubt Microsoft will take the innovative Xbox division for granted."
While I agree with Rick Sherlund that Xbox will most likely never materially effect Microsoft's earnings, it provides an intangible positive sentiment around the company. "There have been a number of calls for Microsoft to break itself up over the years, and so far they are still the giant tech behemoth that has languished below $40/share since the tech wreck of 2000. Xbox is the only thing that has investors excited about Microsoft, so it makes little sense to divest of the division," explained Asif A. The idea that another company like Samsung would acquire that spun off Xbox division is even less likely. That being said, I think it is very unlikely that Microsoft would spin it off.
#Microsoft xbox games division windows
"I think the Xbox division would probably get a better valuation by itself than it is in the current conglomerate form of Microsoft as Xbox is outgrowing the sluggish Office and Windows divisions. "It is simply too unwieldy to try and sell an entire game system hardware and software business.they would have trouble coming to terms with a potential buyer and more likely just exit the game business entirely" It's not very helpful for Microsoft's bottom line, however. As a brand, Xbox is actually very helpful to the company.
Microsoft is sort of caught in a tough spot between brand perception and financial reality. There is synergy with Skype, so as long as those were packaged together, I think Xbox would be fine as a standalone company," he said. "I don't think there are many synergies with the core enterprise software business at Microsoft, so I see little benefit in their being combined and little detriment if they were to split up. Wedbush Securities' Michael Pachter doesn't think it's quite as ludicrous, but he doesn't see a great advantage to spinning off Xbox either. I can't see the upside of a deal like that for Microsoft or for a potential buyer at any time, but particularly before the Xbox One launch such a move would be beyond stupid," he said. "I don't think this scenario is likely at all. Just how likely is this scenario, and does it even make sense?Ĭertainly not now, not right before the company is looking to launch the Xbox One, independent analyst Billy Pidgeon told GamesIndustry International. Rumors have pointed to Microsoft evaluating a major restructuring of the company, and along with the report came interesting commentary from Nomura Equity Research analyst Rick Sherlund who said that Microsoft should sell off its Xbox division.