Sony Computer Entertainment Buys Xbox from Microsoft

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Sony Computer Entertainment, Inc. (SCEI), the video gaming division of parent company Sony Corporation, announced on Thursday it has tentatively bought rival video gaming brand Xbox from Microsoft and also struck a content partnership with the company. The deal is valued at close to $32.8 billion, according to sources. A spokesman on behalf of Microsoft has all but confirmed the news, calling the valuation “accurate” but declining to give further details on the deal.

It has been common practice in the gaming industry to sell game consoles at a loss so companies, such as Microsoft, have to get their money back via license fees from each game that is sold on their systems. Despite these measures, the Xbox division has lost close to $3 billion in the last 10 fiscal years since the inception of the original Xbox console.

Microsoft’s Satya Nadella, who recently succeeded Steve Ballmer as Chief Executive Officer, said during a conference call with reporters that the company’s move was a move that would help Xbox reach different demographics while still maintaining the integrity that gamers associate with the Xbox brand.

“We’re allowing Sony to integrate their technology into the Xbox.” Nadella said, adding that Xbox division will still have the same team in place. “Fans of the Xbox One will still get the same product that they’ve grown to know & love, but now with added support from Sony.”

As part of the deal, Sony will incorporate exclusive Blu-Ray content and PlayStation Move support into the next edition of Xbox One consoles. The new Sony assisted Xbox One consoles are scheduled to hit retailers November 2014, just in time for the holiday season.
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