NEW YORK ( TheStreet) -- Is it a viable plan for Microsoft ( MSFT) to spinoff the Xbox division via an IPO? TheStreet's Debra Borchardt and Chris Ciaccia explore the idea.
While Xbox brought in $7 billion last year, that's down from $8 billion in 2011. However, a new console should revitalize sales, according to Ciaccia. While hardware companies tend to trade with lower valuations, an IPO could unlock value for the Xbox division, while allowing Microsoft's stock to trade with a higher multiple -- since software companies tend to have higher valuations. However, Ciaccia went on to say that if the next CEO was promoted from within Microsoft, an IPO would seem unlikely. There's a small window for such an event to occur. He said the economic data has not been very good as of late, making it appear as though consumer spending might be a little light this holiday season. Not helping matters is Sony's ( SNE) upcoming Playstation 4, which will cost $100 less than the Xbox One. Ciaccia added that if the IPO were to happen -- which he doesn't expect -- the company would want to do it with good publicity, and positive remarks, something that has so far, evaded the new product.