As Steve Ballmer prepares to step down as CEO, Microsoft is searching for a replacement, and one name that's been rumored to take the helm of the Redmond giant is former Nokia CEO Stephen Elop.
But if Elop does get the top job at Microsoft, Bloomberg is reporting that he could be ready to radically refocus the company. According to "three people with knowledge of his thinking," Elop would not only consider shuttering the Bing search engine but also selling off the Xbox business "if he determined they weren’t critical to the company’s strategy."
Elop left Nokia in September, having sold the company to Microsoft for $7.2 billion, and reported that he would become head of a new Microsoft devices unit responsible for hardware such as the Surface tablet and Xbox console.
This might seem somewhat rash, considering that the Xbox business is quite buoyant (last quarter hardware revenue was down, but services revenue was up), and that Microsoft is getting ready to roll out the new Xbox One later this month.
Selling the Xbox brand could be a double-edged sword. On the one side it would mean that Microsoft would lose ground in the war for the living room, but on the other it would mean the company could better focus on more profitable revenue streams.
Also, while the Xbox 360 has been a success, that's no guarantee that the Xbox One will be a success. Analysts are predicting that the next-generation consoles will all have a tough row to hoe, and profits may be a long way off. The Xbox 360 has sold almost 80 million units since its debut in November 2005, and even with the best reception, the Xbox One will take a long time to achieve that level of dominance. It's going to take a lot of marketing dollars, not to mention sweeteners to games companies to secure exclusive titles, to make the new console a success.
The question that the future Microsoft CEO will need to answer is this; is Xbox important to Microsoft, or is it, along with projects such as Bing, merely a distraction from Microsoft's core operations?
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