Xbox Spinoff Seen More Likelt With Ballmer Exit: Real M&A

After 13 years of declining value, some Microsoft Corp. investors want Steve Ballmer’s replacement to take bolder steps to reverse the slide at the world’s largest software maker. That could mean spinning off the Xbox video-game business.

Ballmer’s retirement as chief executive officer may clear the way for a potential spinoff of the Xbox unit to unlock shareholder value. While a consumer success with $7 billion in annual sales, it’s one of Microsoft’s lower-margin divisions and doesn’t drive sales of the company’s core business services and software. Xbox may be worth at least $17 billion on its own, based on Nintendo Co.’s revenue multiple, according to data compiled by Bloomberg. Its value should be even higher given that Nintendo has operating losses, Wedbush Inc. said.