Xbox Remains a Focus at Microsoft As Company Drops "Devices and Services" Moniker

CEO Satya Nadella says, "We will continue to innovate and grow our fan base with Xbox."

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Microsoft CEO Satya Nadella today sent a lengthy email to all Microsoft employees, with the subject "Bold Ambition & Our Core," outlining his vision for what he hopes the company can achieve in the current fiscal year. Principally, the email explains how Microsoft will move away from thinking of itself as a "devices and services" company (a term coined by former CEO Steve Ballmer), in favor of becoming a "productivity and platform" company for a mobile-first and cloud-first world. "We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more," he said.

Though Nadella wants to distance Microsoft from the "devices and services" moniker, that does not mean hardware-based products like Xbox will be affected, at least not yet. "We are fortunate to have Xbox in our family to go after this opportunity with unique and bold innovation," Nadella said. "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."

"Xbox is one of the most-revered consumer brands, with a growing online community and service, and a raving fan base" -- Satya Nadella

Nadella went on to say that Microsoft's new "productivity" focus actually lines up well with its investment in gaming. "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," he said. "Bottom line, we will continue to innovate and grow our fan base with Xbox while also creating additive business value for Microsoft."

Overall, Nadella stressed that gaming is an "important" business unit for Microsoft to be involved in. "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," he said. "The single biggest digital life category, measured in both time and money spent, in a mobile-first world is gaming."

Earlier this year, reports emerged that suggested Microsoft might sell off the Xbox business as a means to double-down on its core competencies. As much as Nadella's comments today suggest that Xbox is not going anywhere, he pointed out that he will consider all options as it relates to delivering on his new strategy for the company.

"Nothing is off the table in how we think about shifting our culture to deliver on this core strategy," he said. "Organizations will change. Mergers and acquisitions will occur. Job responsibilities will evolve. New partnerships will be formed. Tired traditions will be questioned. Our priorities will be adjusted. New skills will be built. New ideas will be heard. New hires will be made. Processes will be simplified. And if you want to thrive at Microsoft and make a world impact, you and your team must add numerous more changes to this list that you will be enthusiastic about driving."

You can read Nadella's full email on the Microsoft website. We're likely to learn just how well the Xbox One has been performing post-price drop next week when Microsoft announces earnings for its latest quarter.

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