It's been a tumultuous week at Microsoft, and the reorganization we heard rumors of seems to be moving ahead. The implications for Xbox development are profound, as platform responsibilities might now be split across multiple departments.

According to Bloomberg, corporate vice president of Windows Program Management Julie Larson-Green is CEO Steve Ballmer's current pick to lead Xbox development. Unfortunately, she wouldn't be a direct replacement for Don Mattrick, who left the company to take over the CEO role at Zynga this week.

The reorganization will put all hardware, including Xbox and Surface tablets, under Larson-Green. Since she began at Microsoft in 1993, Larson-Green has been responsible for early versions of Internet Explorer, the overhaul to Microsoft Office, and interface design for Windows 7 and Windows 8. Larson-Green holds a master's degree in software engineering and a bachelor's degree in business administration.

Rumors also place Skype president Tony Bates at the head of a new division focused on acquisitions, mergers, and relationships with software developers. The latter is a crucial function for game platforms.

We've reached out to Microsoft and were told that the company does not comment on rumors or speculation.

[Source: Bloomberg]

Our Take
There seem to be some good reasons why Microsoft would consider this reorganization and these appointments, but I've got concerns. With Microsoft's push to unify the user experience, placing hardware (including Xbox) underneath the person already responsible for Windows could speed development and improvements across products. 

As Microsoft makes a bigger push with Smartglass, tighter integration with Surface would incentivize purchase of Microsoft's own tablets. Improving the user experience on Xbox, which has actually deteriorated as the 360's life cycle progressed thanks to increased advertising and cluttered navigation, would be a boon.

However, splitting up the core functions related to the Xbox platform seems like a mistake. If Bloomberg's sources are correct (and we've labeled this as rumor since even they are saying that the reorganization isn't finalized), then hardware and developer relationships are going to be in different silos.

What this means for the rest of the interactive entertainment division is unclear. Will existing teams be split up? Will the relationship with the also-rumored new cloud computing division complicate implementation of those services on Xbox One?

If this is how the reorganization is going to happen, Microsoft is going to need to come out of the gate with clarity. Unfortunately, that's one word that doesn't aptly describe them right now.