There has been some talk over the last several months that Microsoft needs to spin off its Xbox business. Microsoft's new CEO Satya Nadella told the attendees at the very first code conference that he has no intention of spinning off the Xbox business. He also said that he was very pleased at how the Microsoft game console business was going.
Nadella said that all of Microsoft's hardware know-how comes from the Xbox division. "It is the thing that is really going to power all the experiences on all the devices today and tomorrow," Nadella said. "In order to be in the hunt for those experiences, and get it right, you do need to from time to time build devices, so you don't leave anything to chance."
The rumor that Microsoft might spin off the Xbox division surfaced late last year for the first time. Paul Ghaffari from Vulcan Capital said, "The search business and even Xbox, which has been a very successful product, are detracting from that. We would want them to focus on their best competencies. My view is there are some parts of that operation they should probably spin out, get rid of, to focus on the enterprise and focus on the cloud."