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New Microsoft CEO faces investor pressure to kill Xbox division

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Posted on February 10, 2014 AT 01:23pm

The Washington Post reports the same investors who called for previous Microsoft CEO Steve Ballmer to step down now want Satya Nadella to focus on the company’s core money-maker, selling enterprise software to businesses. That would mean a shift away from Bing, Surface, and Xbox, and other consumer-oriented devices and services that Microsoft has expanded into over the last decade.

While a push to step back from Bing and Surface might not be surprising—both products that have struggled to earn any serious market share—gamers will probably be perplexed to see Xbox lumped into that group, but it’s not as curious as you might think. While the Xbox 360 and Xbox One have turned Microsoft into a major force within the gaming sector, they’ve nevertheless struggled to turn a profit for the company. In fact, one analyst estimate puts the Xbox division’s losses at more than $1 billion last year.

It’s unclear, however, whether Nadella will actually bow to investor pressure and kill, sell, or spin off these unprofitable ventures. Prior to his appointment, Nadella worked extensively in the business software and cloud computing divisions of Microsoft, making him well equipped to refocus the company on enterprise.

But the Post also notes Nadella has made one move that indicates he’s not interested in abandoning the company’s devices division just yet. Prior to accepting the post, he asked Bill Gates to step down as chairman of the board to advise him on consumer products, which would assumedly include the Xbox and Surface.

Josh Harmon, Associate Editor
Josh Harmon picked up a controller when he was 3 years old—and he hasn't looked back since. This has made him particularly vulnerable to attacks from behind. He joined EGM as an intern following a brief-but-storied career on a number of small gaming blogs across the Internet. Follow him on Twitter @jorshy. Meet the rest of the crew.

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