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Microsoft CEO commits to Xbox

Satya Nadella squashes speculation that he would sell game division, says gaming tech bolsters productivity businesses

Microsoft won't be looking to unload its Xbox business anytime soon. The company today released a memo to all employees from Satya Nadella, in which the recently appointed CEO lays out his vision for Microsoft's future, a vision that clearly includes gaming.

"The day I took on my new role I said that our industry does not respect tradition - it only respects innovation," Nadella said. "I also said that in order to accelerate our innovation, we must rediscover our soul - our unique core. We must all understand and embrace what only Microsoft can contribute to the world and how we can once again change the world. I consider the job before us to be bolder and more ambitious than anything we have ever done."

As for what that core is, Nadella defined Microsoft as "the productivity and platform company for the mobile-first and cloud-first world." That might not sound like it necessarily includes video games, but Nadella added, "We will shift the meaning of productivity beyond solely producing something to include empowering people with new insights."

After namechecking a variety of Microsoft's productivity efforts and promising advances in everything from Office 365 to Windows Phone and Surface, Nadella directly acknowledged the gaming elephant in the room.

"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."

"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," Nadella said. "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."

Nadella noted the strength of Xbox as a consumer brand, and added that technological advances pushed by the gaming business can boost the company's actual core businesses as well.

"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."

Nadella also talked about changing the culture at Microsoft in a handful of ways. He said he wants the company to "obsess over our customers," pledged to invest more in training the workforce and testing new ideas, and resolved to flatten the organization.

"We have clarity in purpose to empower every individual and organization to do more and achieve more," Nadella said. "We have the right capabilities to reinvent productivity and platforms for the mobile-first and cloud-first world. Now, we must build the right culture to take advantage of our huge opportunity."

Speculation about Microsoft selling off the Xbox business had been circulating since last year, when then-CEO Steve Ballmer was planning a major restructuring of the company. When Ballmer announced his retirement in August, the issue was a topic of discussion for his possible replacements.

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Brendan Sinclair avatar

Brendan Sinclair

Managing Editor

Brendan joined in 2012. Based in Toronto, Ontario, he was previously senior news editor at GameSpot in the US.