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Microsoft backtracks on talks of Xbox sell-off

Microsoft's former CEO, Bill Gates, has voiced support for a move to cut the apron strings that tie the multi-billion dollar company to its successful Xbox franchise. Microsoft itself, however, seems more hesitant.

In an interview with Fox Business, Gates was asked whether he would support the new Microsoft CEO Satya Nadella if he decided to spin off the Xbox business out on its own. Gates's response was "absolutely."

Expanding on his answer, Gates continued: "We're taking PC gaming – Windows gaming and Xbox gaming – and bringing those a lot closer together. The power of the PC graphics chips mean you can do great games there."

"So I'm sure Satya and the team will look at that. It's up to them. We're going to have an overall gaming strategy so it's not as obvious as you might think."

When Nadella first took up the mantle of Microsoft CEO in February, he swiftly reorganised the company's gaming business into three teams: Xbox, Xbox Live and the creative team which covers Xbox Music, Xbox Video and Microsoft studios.

The three-way split came as sales figures faltered in the wake of stiff competition from Sont's PlayStation 4 console. After having launched the Xbox One console in November 2013, by January the PS4 was selling 1.5 times more units than its Microsoft rival in the UK alone. Two months down the line, the hiccup evolved into full on heartburn by the Q3 earnings report that illustrated the full extent of tepid Xbox One sales.

As a result some critics have suggested that making the Xbox a business in its own right may help the company to focus more – or at the very least even out its balance sheet.

Bill Gates voicing his support for the move would hold some weight indeed, but since the interview that took place alongside Berkshire Hathaway CEO Warren Buffett a Microsoft spokesperson has amended Gates' comments. According to the spokesperson what Gates meant was that he doesn't believe the gaming division should be split, but he would support Nadella if he chose to do it.

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