Microsoft to reorganize entertainment division

SAN FRANCISCO: Microsoft Corp. has split its entertainment and devices division into four businesses, the latest reorganization at the world's largest software maker, according to a company e-mail to employees seen by Reuters on Wednesday.

The reorganization follows Microsoft's decision in September to streamline its businesses into three divisions to compete more effectively against Google Inc., Oracle Corp. and the Linux operating system.

The chief of the entertainment and device unit, Robbie Bach, responsible for launching Microsoft's Xbox video game business, told employees in a Wednesday e-mail he would turn his focus to longer-term strategy and partner relationships.

The decision to reorganize the unit comes after the company in November launched its latest Xbox 360 video game console. Next year, Xbox rivals PlayStation 3 from Sony Corp and Nintendo Co. Ltd.'s Revolution will hit the market.

"While I will continue to play an important role in the games area, I will spend more time thinking about our broader challenges and opportunities across the division," Bach wrote in the e-mail.

Bach said Bryan Lee would take over as head of a new entertainment business charged with overseeing the company's growing digital efforts in music, television and video.

Other changes include broadening the role of Peter Moore as head of the interactive entertainment business, which includes both the Xbox and Games for Windows business, Bach said.

Tom Gibbons will remain in charge of the consumer productivity experiences unit, which includes the computer mouse and keyboards business. Pieter Knook remains chief of the mobile and embedded business and the communications sector sales force, the memo said.

The reorganization of the entertainment division comes after Microsoft in September announced it would streamline its businesses into fewer divisions.

The company aligned the three divisions along its core Windows product and its MSN Internet arm to challenge Web search leader Google, a business division to focus on Office and other business software products, and a division including the company's Xbox, consumer and device businesses.

Bach was tapped as president of the entertainment and devices division that also includes the company's cell phone software business.

The changes came amid threats from competitors that are delivering software-based services over the Web, such as Google. Longtime business software rival Oracle has been on an acquisition spree while Linux remains a threat in the server software market.