Photo: Associated Press
Microsoft’s Xbox division has always struck us as the odd duck inside the company.Why does a corporation which focuses largely on selling software and services to enterprises have a kick butt gaming group?
Now that Xbox is a profitable, established brand, why not spin it out as its own company, where it has to fend for itself and it can innovate without worrying about the bureaucracy of a massive parent corporation?
We put the question to one of Xbox’s founders, Kevin Bachus. His response: Xbox is a really good fit for Microsoft, now more than ever, as tech companies start fighting for the living room, and expanding their mobile gaming on smartphones.
Bachus was one of the four original people at Microsoft to work on the Xbox. Today, he was named as head of product at Bebo. We were talking to him about his new job, when the conversation drifted to his old job at Xbox. (Bachus says he’s still close with people at the company.)
Partly because of historical reasons, Xbox operates rather autonomously within Microsoft. When Xbox was starting out, many people in the company never thought the console would be made, so they didn’t bother meddling with with it. Why waste your time on a dead end project?
Of course, it did become a reality.
Bachus talked about when Microsoft was making its final decision on Xbox. “I remember very clearly being in a meeting with Steve Ballmer and Bill Gates. Bill Gates said, ‘Either we do this or we don’t, and we become Oracle focused only on enterprise and we give up on our consumer businesses. Sell the gaming division to Electronic Arts, and sell off MSN.'”
Microsoft decided to stick it out. When the company did early focus group tests on the Xbox, consumers were a little put off by the fact that Microsoft was making a console. “What’s the spreadsheet company doing in gaming?” recalls Bachus.
But, the Microsoft brand actually helped. Consumers think Bill Gates is a god and they trusted he’d make something cool.
That was then. Today, Xbox has earned its own spot in the world of gaming. It doesn’t need Microsoft to gain consumer trust.
But, in a slightly ironic twist, Microsoft needs Xbox more than ever before.
Down the road, Kinect looks like promising futuristic technology that could be tied into a number of Microsoft products.
While Xbox might look like an odd duck from the outside, it’s quickly becoming an integral part of the business. Spinning it out now, when it’s about to be more important than ever makes no sense.
See Also: 10 Reasons You Should Love Microsoft