Microsoft is considering spinning off Xbox into a separate company - The Information
Preparing for a future sale cannot be ruled out either
Xbox could become a separate company run by Microsoft along the lines of LinkedIn and Github / Photo: news.xbox.com
Microsoft is considering options to reorganize the Xbox gaming division, including its possible spin-off into a separate wholly-owned subsidiary, The Information reported citing sources, its publication quoted by Reuters.
LinkedIn and GitHub could be a possible model for Xbox: Microsoft fully owns them, but operates them as separate companies. A joint venture with partners is also being discussed, which could make it easier to sell the gaming business in the long run, The Information's sources said. A final decision on the restructuring has not yet been made, they said.
The Information comes after Bloomberg reported on June 10 that Xbox is preparing major staff cuts and significant reductions in marketing and other expenses. These measures could be the first major restructuring of the gaming division under the new management, the agency noted.
Xbox has struggled in recent years, with Microsoft's reliance on its subscription-based Game Pass model and Xbox Cloud gameplay failing to offset declining console sales and a shortage of major game releases, Reuters writes.
Asha Sharma, who took over Xbox in February, is set to increase investment in developing new games across the company's major franchises, including Halo, Fallout and The Elder Scrolls. Microsoft CEO Satya Nadella and CFO Amy Hood have already approved increased spending on creating major game projects in the fiscal year that begins in July, although a final budget has yet to be approved, Reuters noted, citing The Information.
Xbox will need to rebuild its platform infrastructure and rethink its portfolio in the coming weeks and months, Sharma said in an open letter published June 10. Over the past five years, revenue for the business has declined by nearly $500 million despite investing more than $20 billion in content, platform and hardware. The company is also reviewing its development strategy: Xbox intends to bet more on exclusive games, refusing to release some future projects on PlayStation and Nintendo. The head of Xbox also noted that the company is affected by the crisis of components: their prices have doubled since she took office. Despite this, the company still has plans to release a next-generation console called Helix.
This article was AI-translated and verified by a human editor
