The entire division is losing money and will continue to do so
The next generation of home gaming consoles has not yet been officially announced but that’s not stopping analysts from predicting the way it might influence the fortunes of companies like Microsoft and Sony.The most recent theory sees the Xbox division continuing to post long-term losses for Microsoft, which might then sell it to rival Sony.
MCV quotes analyst Adam Hartung as saying that, “The entertainment division will be spun off, sold to someone like Sony or possibly Barnes & Noble, or dramatically reduced in size. Unable to make a profit it will increasingly be seen as a distraction to the battle for saving Windows - and Microsoft leadership has long shown they have no idea how to profitably grow this business unit.”
The industry watcher believes that the company will also see big layoffs during the coming three years and that it will be forced to close its online division.
Hartung adds, “Microsoft makes more than 75 per cent of its profits from Windows and Office. Less than 25 per cent comes from its vaunted servers and tools. And Microsoft makes nothing from its Xbox/Kinect entertainment division, while losing vast sums in its on-line division.”
It seems that failure is so ingrained in Microsoft’s future outlook that now even a new chief executive officer and fresh long-term thinking cannot save the company.
The analysis might be correct but only someone who does not understand the gaming world believes that Sony, which has fought Microsoft for two console generations, would be ready to pick up the Xbox division.
At the moment, the only next-gen device that’s out is the Wii U from Nintendo.
Sony and Microsoft are expected to make official announcements about the devices codenamed Durango and Orbis in the coming months, with launch set for the fall of this year.