Microsoft CEO says Xbox not a core business, but not far from it

Xbox is not in danger of being phased out in Microsoft today, but we feel this statement from CEO Satya Nadella is a red flag to current fans.

Explaining Microsoft’s new direction under his leadership, Nadella bluntly states that Xbox is not a core business from the company. Having said that, it isn’t that far off from it.

Here’s Nadella’s statement to Fortune:

Xbox isn’t that far from [the core]. We can do a few more things than the core. But the point is, you’ve got to have a culture to do it.

I want us to be comfortable to be proud of Xbox, to give it the air cover of Microsoft, but at the same time not confuse it with our core.

And here’s an excerpt from an earlier memo he emailed employees:

As a large company, I think it’s critical to define the core, but it’s important to make smart choices on other businesses in which we can have fundamental impact and success. The single biggest digital life category, measured in both time and money spent, in a mobile-first world is gaming.

We are fortunate to have Xbox in our family to go after this opportunity with unique and bold innovation. Microsoft will continue to vigorously innovate and delight gamers with Xbox. Xbox is one of the most-revered consumer brands, with a growing online community and service, and a raving fan base. We also benefit from many technologies flowing from our gaming efforts into our productivity efforts – core graphics and NUI in Windows, speech recognition in Skype, camera technology in Kinect for Windows, Azure cloud enhancements for GPU simulation and many more.

Bottom line, we will continue to innovate and grow our fan base with Xbox while also creating additive business value for Microsoft.

You and I may not like this news as gamers, but Sadella makes these statements in light of the challenges of steering Microsoft as a whole towards the right course. In his mind, Microsoft’s strengths lie in productivity and platforms. Xbox does have a role to play in it, as it continues to be a successful brand for the company, but under Nadella, it is not what will define Microsoft.

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