This would be one of the best outcomes for Xbox. This would make Xbox an actual gaming company, with actual budgets instead of spending wildly out of Microsoft's pockets. This would also get Xbox off of Microsoft's books and wouldn't be held to high margins that's expected out of Azure, Windows and other Microsoft products.
The problem is that PlayStation usually operates between an 8-12% profit margin for Sony and that would still be considered low for Microsoft. Xbox wouldn't be held to that insane standard as the gaming industry operates differently than Microsoft's business model.
The rub is that Microsoft still would own the company. So if the day comes that Xbox is a sustained, profitable company, Microsoft could always reabsorb it back into the corporate fold. Right now, it's just hard to justify to the board and investors in dumping billions into a division without seeing a return and a division that's a structural mess.
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Re: Microsoft Has Considered 'Spinning Out Or Restructuring' Xbox, Claims Report
This would be one of the best outcomes for Xbox. This would make Xbox an actual gaming company, with actual budgets instead of spending wildly out of Microsoft's pockets. This would also get Xbox off of Microsoft's books and wouldn't be held to high margins that's expected out of Azure, Windows and other Microsoft products.
The problem is that PlayStation usually operates between an 8-12% profit margin for Sony and that would still be considered low for Microsoft. Xbox wouldn't be held to that insane standard as the gaming industry operates differently than Microsoft's business model.
The rub is that Microsoft still would own the company. So if the day comes that Xbox is a sustained, profitable company, Microsoft could always reabsorb it back into the corporate fold. Right now, it's just hard to justify to the board and investors in dumping billions into a division without seeing a return and a division that's a structural mess.