Will Microsoft Corporation (MSFT) Earnings Grow From Its Restructuring?

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Meanwhile, although it faced an initial backlash over the high prices and restrictions of its new Xbox One gaming console, Microsoft responded by making the Xbox One accessible for offline play and allowing the sharing and resale of games. As a result, the company has seen pre-order sales jump ahead of Sony Corporation (ADR) (NYSE:SNE) and its PlayStation 4, even though the PS4 carries a lower price point than the Xbox.

The big question ahead is how the recent restructuring of Microsoft’s corporate divisions will affect earnings. By diversifying beyond product-based divisions, Microsoft should be better able to address different needs within fast-growing niches like cloud computing and mobile devices. Yet business partners, resellers, and channel distributors aren’t excited about the move, which they see as a knee-jerk response to rivals that threatens their relationships because Microsoft will become more of a direct competitor against them through its retail network. If Microsoft alienates its partners, then the changes could have a backlash that hurts earnings going forward.

In Microsoft’s earnings report, watch for further discussion of how new divisions based on engineering, marketing, and research will work together to improve the company’s product-development process. In the end, all the reshuffling could amount to nothing if it doesn’t lead to more innovation that makes its way through the pipeline to become hit consumer products.

The article Will Microsoft Earnings Grow From Its Restructuring? originally appeared on Fool.com is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool owns shares of Microsoft.

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