The Wall Street Journal is reporting that Microsoft is planning a significant shake-up to the management team at the heart of its Entertainment and Devices Division, which serves as the home of Xbox 360 and Zune.
The changes could be revealed as early as this week, the site claims.
Last week it was reported that long-term Xbox exec and chief technology officer J Allard is to quit the firm after the departure of a tablet PC project he was leading.
EDD is headed up by Robbie Bach and has in recent times reversed years of sustained losses in its Xbox 360 unit, transforming it into the profitable part of the division. However, MP3 player Zune has been moderate success at best, and the growing menace of Google and Apple could see Microsoft in the hunt for large-scale organisational changes.
There's also every chance it will want to rethink how it approaches its mobile phone software and Games for Windows services, both of which have failed to deliver on their lofty goals.
Though current trends would suggest that an amalgamation of departments is the most likely outcome of the changes, it's also possible that Microsoft is considering splitting its Xbox, Windows gaming, MP3 and mobile phone operations.