Should Microsoft Sell the Xbox Brand?

With dismal hardware sales and massive layoffs is it time for Microsoft to cut their losses?

Since Microsoft made the decision to cut the Kinect from the Xbox One you may have heard reports that sales of the console have more than doubled, but this is just a clever marketing spin to paint the Xbox One in a more favorable light.

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Despite the Xbox One’s price drop the PS4 outpaced it by  36% in June. Microsoft is trying its hardest to hide the fact that sales for 2014 have been so poor, that they’ve been selling from their surplus inventory and have barely had to manufacture new consoles.

Last quarter, Microsoft reported 2 million total console sales. This included 1.2 million Xbox Ones and 800,000 Xbox 360s. This quarter Microsoft announced a grand total of 1.1 million console sales and if we take those numbers and assume the 360 is still selling similarly then we arrive at only 300,000 Xbox Ones sold for the quarter ending in May. Just as a comparison, that puts the Xbox One on par with Nintendo’s notoriously poor seller, the Wii U, for their May quarter. 

How is it possible for Microsoft to sell nearly 197,000 Xbox Ones in the U.S. in June if it has shipped 300,000 worldwide for the entire quarter? It’s because Microsoft has been sitting on too many consoles and it’s now selling out of its backlogged stockpile. 

The new CEO of Microsoft, Satya Nadella, wrote a 3,100 word memo on the future of the company in which he only spent one paragraph talking about the Xbox brand. This has led many to speculate that Nadella isn’t committed to it and that talks of spinning the Xbox brand off of the main company could begin anew.

Since the original Xbox’s release Microsoft has always planned to use the machine to take over consumer’s living rooms. They saw the Xbox as the one-stop home entertainment box that would play video games, movies, music and television. The recent cancellation of the Xbox TV service is but the latest reversal of nearly every decision they’ve made about the Xbox One since before it was released. 

A lack of a defined vision for the Xbox One has clearly hurt its sales numbers. This isn’t the only place Microsoft appears to be floundering, the company now only accounts for 1% of the combined PC and tablet market. To make matters worse Microsoft recently announced that 18,000 employees will be laid off over the course of the year.

With so many things dragging it down does it make sense for Microsoft to cut their losses and sell off the Xbox brand? After all they don’t just make video games and perhaps the sale of such a popular brand would give them the capital they need to reinvigorate the company. 


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Author
Rocky Linderman
I’m a freelance camera assistant by trade, but I also love video games. I run a weekly podcast called Video Game Wundercast.