Xbox 360 logo

While catching up with stock market updates, I noticed that Kim Caughey Forrest of Fort Pitt Capital suggested that Microsoft should get rid of Xbox, despite it being a “formidable cash machine” she says. Why? Because “Xbox doesn’t belong” and doesn’t fit with the other “corporate” products like Office.

It seems to me like a terrible idea. Xbox is a wonderful franchise for Microsoft, and one that is truly interconnected with Windows and Direct X. It’s not obvious to outsiders (although Kim Caughey is a former software engineer), but one of the strength of Xbox is that it looks very much like Windows, from a developer’s perspective. Of course, there are important differences, but overall, this is not a negligible aspect of Xbox. Also, all the next-generation cutting-edge computer graphics in gaming is developed on DirectX.Secondly, Xbox has a real chance of beating Sony and Nintendo in the next-generation console war, so it’s one more reason for Microsoft to keep and nurture the franchise. Xbox also helps Windows Live, Bing and it will soon help Skype as well.

Finally, even if Microsoft wanted to sell it, it’s hard to tell who could afford to buy it and lose billions on the next generation hardware. Retaining key software employees would also be difficult, and the synergy between the DirectX team and the Xbox team would be lost. Would the new Xbox owner trust Microsoft with the OS development (and pricing)? That’s a risky proposition.

Xbox represents a rising future for Microsoft, much more so than Office, so selling the franchise now because it “doesn’t belong” *is* a terrible idea. Watch the video below.

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