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Bill Gates sparks debate over Microsoft selling off its Xbox business

Bill Gates sparks debate over Microsoft selling off its Xbox business

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For years, former Microsoft CEO Bill Gates has avoided tough questions about the software giant, explaining he was focused on his philanthropy work. After stepping down as Microsoft chairman in February and "substantially" increasing his time at the company, Gates has held one of his first TV interviews since the appointment of Microsoft’s third CEO Satya Nadella. Discussing his new role, Gates remarked that Nadella is off to a great start. "He’s re-examining all the things," explains Gates. "He’s already made some really good changes. It’s exciting to have young blood, new thinking."

While Nadella was one topic of discussion, questions posed by university students during the Fox Business interview revealed some of Gates’ thoughts on Microsoft spinning off its Bing and Xbox businesses. Investors have been calling for Microsoft to sell off Bing and Xbox over the years, but the company has been reluctant and has continued investing in both. "We’re thinking about, are there pieces that are separable," admits Gates, while defending Microsoft’s Bing search efforts as a "fundamental technology" for the company. Gates is pushed on a potential Xbox sale during the interview, but he doesn’t defend Microsoft’s console hardware nearly as much as Bing.

Gates would 'absolutely' support a Nadella Xbox sell off

"We’re taking PC gaming, Windows gaming and Xbox gaming, and bringing those a lot closer together," notes Gates, explaining that Microsoft has an overall gaming strategy so an Xbox sell off is "not as obvious as you might think." Despite that, Gates says he’s "sure Satya and the team would look at that [selling off Xbox] and it’s up to them," adding that he would "absolutely" support Microsoft’s new CEO if he chose to sell the Xbox division. That's not exactly glowing praise for the Xbox, but it's clearly Gates showing his support of the new Microsoft CEO. Indeed, that's how Microsoft’s head of communications, Frank Shaw, attempted to explain Bill Gates’ comments yesterday, noting they were "support of Satya as CEO." Gates was key to the original introduction of the Xbox back in 2001, standing on stage with The Rock for the console's launch.

The comments also follow rumors that former Nokia CEO Stephen Elop would have considered selling off Microsoft’s Xbox and Bing businesses if he had secured the top job at the company. Elop has now rejoined Microsoft as the head of the company’s hardware business which includes Nokia devices, Surface, and Xbox hardware. It’s not impossible to imagine an Xbox sell off under Elop and Nadella, especially as Microsoft is inheriting a troubled phone division and the company still isn’t making money with its Surface tablets. However, Xbox is faring well these days thanks to strong Xbox 360 sales and Microsoft’s subscription Xbox Live service. Microsoft has also released Xbox One with hardware and software that’s more PC-like, thanks in part to the core of the console running Windows 8, and a big focus on TV and entertainment in the living room. All of this work makes it increasingly difficult for Microsoft to package its Xbox software and hardware into a company it could easily sell off.


Whether or not Bill Gates truly backs the idea is unclear, but Gates’ comments may suggest that those ideas are being floated around inside the company. Xbox One might be lagging behind Sony’s PlayStation 4 sales, but the Xbox is still an important brand that’s recognized by consumers over many other failed hardware efforts from Microsoft. That alone could convince Microsoft not to sell off its Xbox business in the near future, but investor calls for an Xbox sale will undoubtedly continue.