Microsoft CEO Could Not Have Shut Down Xbox Division in 2021 – Spokesperson
With reports from earlier this week about Microsoft CEO Satya Nadella being faced with a choice to shut down the company’s Xbox division back in 2021, multiple analysts, as well as a spokesperson from Microsoft have chimed in on the matter.
According to WCCFTech, a spokesperson from Microsoft has stated that Nadella could not have shut the Xbox division down, referring to it as a rumour.
Among the analysts talking about this are Janus Henderson Investors portfolio manager Denny Fish, analyst Michael Pachter, and Macquarie Science and Technology fund investment manager Gus Zinn.
A common theme throughout the comments is that, while the Xbox division might have required some big investments, such as the acquisition of Activision Blizzard for example, the business has still been one of the most consistent performers for Microsoft.
“It’s also a business that had some degree of consistency over, like, a three- to five-year period but was highly volatile from year to year, because you’re so dependent on the big releases like Call of Duty,” said Fish.
Ultimately, a lot of the investors and analysts feel that whether or not the Xbox division gets shut down in the future will come down to if the Activision Blizzard acquisition will end up helping with growth in the longer term, especially for recurring payment-based services like Xbox Game Pass.
“Seventy billion dollars is not a pittance—it’s a lot of cash,” said Pachter. “They might lose money in the short term, which is fine, as long as they can prove that in the long run Game Pass is a solid source of recurring revenue.”
On the other hand, Zinn believes that demand for services like Game Pass might be on a downward trend. “I just think the majority of the game market doesn’t really want a Game Pass,” he said.
Whether or not the company shuts down its Xbox division, however, Nadella has in the past maintained a focus on the fact that Microsoft has traditionally been a software company. Back in October, Nadella reiterated
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