Xbox may 'dissolve into Windows,' ex-Sony exec Shuhei Yoshida says

PlayStation's previous head of indies Shuhei Yoshida openly shares his thoughts about the future of Xbox, and it apparently looks a lot like Windows.

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Last year, well-respected industry figure Shuhei Yoshida left Sony after 35 years serving PlayStation. Now he's more of a consultant-for-hire, helping indie game studios and going around to various events. This is a seasoned former executive who has likely spent a lot of time with sensitive data and info that isn't widely shared or known, so when he makes predictions, it's worth taking into consideration.

Yoshida recently shared his thoughts about the ongoing Xbox drama on Twitter, saying that he essentially believes the Xbox games unit could be absorbed by Windows. Xbox's new CEO Asha Sharma has issued a daunting decree that will "reset the business" after the group delivers a dismal 3% profit margin throughout this year.

"XBOX will dissolve into Windows, and it's MS's strength," Yoshida wrote in a stylized post.

The interesting thing is that Xbox already belongs to the same operating segment as Windows. In fact, these two groups have shared the same segment for a while now, belonging to Microsoft's More Personal Computing segment.

By housing Xbox under this branch, Microsoft does not directly report Xbox profits, instead reporting the combination of both Windows and Xbox. This makes it impossible to determine Xbox's profits, which are a better reading of the group's current health.

That's why our discovery of the 12% accountability margin (AM) years ago carried such weight. This was the first time we've ever gotten anything akin to Xbox's actual profit-level performance.

Now, years later, Xbox's new CEO Asha Sharma has openly talked about the accountability margin, even going so far as to confirm that the organization has now dropped to a 3% margin.

It's also worth mentioning that the new console, Project Helix, will essentially be a PC-console hybrid, so it's kind of a physical manifestation of what Yoshida is referring to.

On an operational level it seems more likely that the units (Xbox and Windows) would remain separated and report their earnings and results individually within the same segment. But product-wise, we could see some kind of greater convergence moving forward.

Microsoft has yet to announce how it will reset the Xbox business, but reports indicate that layoffs are a big part, and more announcements may happen soon.