Microsoft considers spinning off Xbox gaming division
What's the story
Microsoft is considering a major overhaul of its Xbox gaming division, including the possibility of spinning it off or restructuring it as a wholly owned subsidiary. The company is also looking at options like forming a joint venture with other partners. These moves are part of Microsoft's strategy to make the gaming business more marketable, The Information reported, citing three people familiar with the discussions.
Challenges
Xbox's recent struggles and Asha Sharma's plans
The Xbox division has been facing challenges in recent years, as Microsoft's focus on subscriptions and cloud gaming hasn't compensated for falling console sales and a lack of hit games. Despite these issues, no immediate restructuring is planned. Asha Sharma, who became CEO of the gaming unit in February, intends to increase spending to fast-track development of new titles from popular franchises like Halo, Fallout, and The Elder Scrolls.
Strategic support
CEO's support for increased game development investment
Microsoft CEO Satya Nadella and CFO Amy Hood have backed Sharma's proposal to increase investment in high-profile game development for the fiscal year starting in July. However, the budget is still in the works and could change. Meanwhile, Bloomberg News has reported that Xbox is planning major layoffs next month along with significant cuts to marketing and other budgets. This would be Sharma's first major restructuring move since taking over as CEO of the gaming unit.