Rumor mill: Two Microsoft Shareholders Want Satya Nadella to Kill Xbox, Bing, and Surface

[anony_mouse]

XBox is key in owning the living room which is the new battle ground for consumer electronics and right now XBox is way ahead of the competition. If Microsoft bought Netflix they would be on top. It would be great for the short term if they sold these small divisions but really bad for the long term. Microsoft can't always depend on Office and server tools as a money maker.

If Microsoft want to own the living room, they need to make a cheap TV box with the video services from the xbox. The xbox itself is far too expensive to appeal to non-gamers. They should also look at getting their software built directly into TVs.

Android TVs will appear this year... once again, are Microsoft being left behind?

 

[jmshub]

The best thing going for Microsoft in the living room is that Google is absolutely awful at this. Chromecast is Google's third swing at this after Google TV and Nexus Q.

I think a cheaper XBox1 that doesn't even necessarily have as much performance may be good for people who want the streaming and media options of the XB1 without the game playing? I don't know. Obviously, the XB1 will get cheaper the longer it is in the market.

 

[waazzupppp]

I have to chime in with my worthless opinion on this one too.

Xbox isn't going anywhere - as a matter of fact, they are poised to be the best entertainment system on the planet. I would look for a lighter version of the Xbox to come out that supports streaming content and is more of an entertainment system than gaming one. This would give them something to position against Apple TV, Chromecast and even the "Smart TV" concept. When combined with Xbox Music/Video/Gaming you have a system that is much more powerful than the competition.

Bing... Oh I love Bing and I hate Bing... Taking Bing mobile is a huge thing and with the Foursquare deal, it just got much easier. By paying to use Foursquare's databases, location info, mapping and personal usage data just became abundant. Bing was 100% dependent on the agreement with NavTeq from 10 years ago. Sure, the GPS was good, but the maps just weren't keeping up. Using Foursquare will help the mapping data immensely. As far as the rest of Bing goes, as long as I can find the data I need on the first page of a search, I'm good with it. I know others prefer Google or something else, but honestly, it works just fine for most searches.

Now, killing the Surface is something that actually makes sense... UNLESS... What are the chances that RT goes away and tablets start running Windows Phone? Since WP 8.1 supports higher resolution screens and multi-core processors, it would make sense to allow manufacturers to place Windows Phone on their 7"-10" tablets. Since the core is now similar to Windows 8, you should easily be able to port over the core Apps to make the tablet function like RT does, but give it the compatibility that it needs to run the WP Apps - which are more plentiful than WinRT Apps. This would play out nicely for moving the "Surface" line to the "Lumia" line and continuing to build Microsoft Lumia phones, phablets and tablets. Microsoft would then continue to sell touch screen PC's with full versions of Windows through third party manufacturers - though they may want to bring those in house also if Google gets their hands on Lenovo or what's left of the Sony PC division after the buyout this week. I like the move of bringing ONE mobile OS to the devices. Keep it streamlined enough that a basic 1GB RAM/8GB Storage device can run it, but powerful enough that a 2GB RAM/64GB Storage tablet can flex it's muscle as well. The system is pretty good overall right now, but by allowing it to run on multiple devices, you could theoretically have the "Three Screen Concept" going on at least 2 of your three screens...

Now - additional things that Nadella should do...

Along with merging the tablet and phone OS, he should contract with the Bluestacks crew to develop a great Android emulator for WP. This would help those looking for all those "missing apps" get them back with minimal effort. Also building that into the tablet system would expand the experience to those coming over from an older Android tablet (plus ease the blow of having to repurchase Apps for another system.)

Create a unique reason to purchase Windows again. The first thing that comes to mind here is a big cash offer to Nintendo - and I mean BIG! Bring Mario, Zelda and the rest of the Nintendo crew to Xbox and Xbox Mobile. This will not only increase the sale of Windows PC's, Xbox's and WP's, but it will also increase the ability to market to younger kids and parents that remember the 'good ole days' of console gaming. We already have Nintendo emulators on WP, so why not make it official and bring this stuff home. It's not like $500 million or so wouldn't be enough to get Nintendo interested. Just do it already!

Now that we have solidified the OS's down to two, we need a better communication between them. Why on earth can't I wirelessly sync photos to my PC (not using SkyDrive/OneDrive) like I did with Zune? Welcome back 2008... Develop a Windows Phone Sync for Xbox and Windows that blows the others away. My biggest complaint with the iPhone is that I have to use that crappy iTunes software for everything. No thanks... Microsoft needs to get back to a software where we can control the music, photos, videos and files that go to our phones just like Windows Mobile offered. Maybe they should bring back the sync cradle too?

Oh well, I could go on and on with this stuff they should do, but really, 2 OS's - one mobile, one PC - and get something exciting in the works for Windows Phone gaming. That should be a great start to getting things rolling with the new CEO.

 

[jmshub]

Xbox isn't going anywhere - as a matter of fact, they are poised to be the best entertainment system on the planet. I would look for a lighter version of the Xbox to come out that supports streaming content and is more of an entertainment system than gaming one. This would give them something to position against Apple TV, Chromecast and even the "Smart TV" concept. When combined with Xbox Music/Video/Gaming you have a system that is much more powerful than the competition.

Bing... Oh I love Bing and I hate Bing... Taking Bing mobile is a huge thing and with the Foursquare deal, it just got much easier. By paying to use Foursquare's databases, location info, mapping and personal usage data just became abundant. Bing was 100% dependent on the agreement with NavTeq from 10 years ago. Sure, the GPS was good, but the maps just weren't keeping up. Using Foursquare will help the mapping data immensely. As far as the rest of Bing goes, as long as I can find the data I need on the first page of a search, I'm good with it. I know others prefer Google or something else, but honestly, it works just fine for most searches.

Microsoft could spin off both of these companies as separate entities and could use Bing exactly like they are using Facebook and Foursquare. Investing in Bing would still be cheaper than running Bing at a loss. And with one business to focus on, Bing would be poised to improve quicker than they would as just another project in the (overly?)massive Microsoft.

Now, killing the Surface is something that actually makes sense... UNLESS... What are the chances that RT goes away and tablets start running Windows Phone? Since WP 8.1 supports higher resolution screens and multi-core processors, it would make sense to allow manufacturers to place Windows Phone on their 7"-10" tablets. Since the core is now similar to Windows 8, you should easily be able to port over the core Apps to make the tablet function like RT does, but give it the compatibility that it needs to run the WP Apps - which are more plentiful than WinRT Apps. This would play out nicely for moving the "Surface" line to the "Lumia" line and continuing to build Microsoft Lumia phones, phablets and tablets. Microsoft would then continue to sell touch screen PC's with full versions of Windows through third party manufacturers - though they may want to bring those in house also if Google gets their hands on Lenovo or what's left of the Sony PC division after the buyout this week. I like the move of bringing ONE mobile OS to the devices. Keep it streamlined enough that a basic 1GB RAM/8GB Storage device can run it, but powerful enough that a 2GB RAM/64GB Storage tablet can flex it's muscle as well. The system is pretty good overall right now, but by allowing it to run on multiple devices, you could theoretically have the "Three Screen Concept" going on at least 2 of your three screens...

I think Microsoft is converging WinRT and WinPRT. It is a process, and it will take a while, maybe a goal for Windows 9?

Along with merging the tablet and phone OS, he should contract with the Bluestacks crew to develop a great Android emulator for WP. This would help those looking for all those "missing apps" get them back with minimal effort. Also building that into the tablet system would expand the experience to those coming over from an older Android tablet (plus ease the blow of having to repurchase Apps for another system.)

Microsoft would kill their app store and alienate their developers if they would do that. Why would anyone develop for WP if WP can run Android apps. Besides, the ability to run Android apps hasn't helped BlackBerry. BB10 is basically dead on the vine, despite launching without the "app gap".

Now that we have solidified the OS's down to two, we need a better communication between them. Why on earth can't I wirelessly sync photos to my PC (not using SkyDrive/OneDrive) like I did with Zune? Welcome back 2008... Develop a Windows Phone Sync for Xbox and Windows that blows the others away. My biggest complaint with the iPhone is that I have to use that crappy iTunes software for everything. No thanks... Microsoft needs to get back to a software where we can control the music, photos, videos and files that go to our phones just like Windows Mobile offered. Maybe they should bring back the sync cradle too?

The cloud is the backend to modern computing. It is how every platform works, and local storage is being increasingly de-emphisized. Office now defaults to save to Skydrive. This is just how computing is going to work, and quite frankly, it's probably better this way.

 

[thatotherdude24]

This is why they are not CEO, you don't cut off the arm that's putting the money in your pocket.

 

[bilzkh]

My $0.02.

There's been a lot of impulsive decision-making on the part of some shareholders and Microsoft fans. It's a "destroy this" and "start that" dichotomy with little to no attention given to the merits of each product/service, and no focus on reaching a sober middle ground.

Here are my thoughts.

1. Xbox: The brand has value, there's no doubting it. It'd take an incredibly dense and ridiculous person to suggest that Microsoft kill or sell off the entirety of Xbox. My suggestion. Scale down hardware development and focus more on the cloud. For starters, get original Xbox and Xbox 360 games available for streaming (a la PlayStation Now). Try pushing these Xbox Services across platforms and across form-factors, i.e. tablets, PCs, phones, televisions, media boxes, etc. You may even be able to score deals with some companies (e.g. LG) to bundle Xbox Gaming, Music, Video, and others (e.g. Bing, IE, etc) to their TVs from the get-go. Perhaps get some reliable OEM to take on the hardware work by producing $100-150 Xbox units to deliver your services to consumers.

2. Surface: Only an ignorant person would want this killed. Microsoft needs a hedge against the OEMs as they transition to Android and Chrome, and an aspirational device to bring out the best of Microsoft. This isn't even about Windows, but about having Microsoft Services (including Office) sitting front and center, ahead of Docs, ahead of Pages, etc. This hardware platform will also be the future of Xbox, mark my words.

3. Bing. Sorry, the technology is an integral component for Microsoft development. Back off.

 

[a5cent]

If I had only run across one article stating that consoles are doing good business I might be inclined to take your word for it, but I've seen numerous ones that disagree with you for weeks.

You don't have to take my word for it. I provided two references supporting my claims (this and this). All you need to do is look at them. Outside of this forum, none of that is controversial. I asked you to provide a single reference supporting your opposite claim, but you provided none. Telling. No? Like I said, the articles you read aren't disagreeing with me. You simply fail to understand the difference between annual profitability and overall profitability. For some reason you aren't able to acknowledge that point.

Xbox360 is still selling well and has perhaps 2-3 years left. The ps2 made a fortune after the ps3 came out. There is overlap.

In the future that might be, but that is besides the point. The point is that today, both the Xbox 360 and PS3 have lost their companies money. Billions of dollars. The Xbox 360 would still have to rake in 2 billion in pure profit, just to compensate for the tallied up losses.

I do not agree... <snipped> Xbox as a game console may have seen losses on paper...

You can not disagree with me, and then turn around and admit that the Xbox 360 has lost money on paper. That is the only claim I'm making, so you've already agreed with me.

Only by admitting that the Xbox franchise is a financial failure, can we understand where these calls for a spin off come from, which is the point I'm trying to get across. It seems people have a problem acknowledging what they don't want to hear. Why else are people having difficulty understanding something rather simple?

I'm sure you're right about the many intangible benefits. I expect we will only see more of them in the future, assuming the Xbox franchise sticks around.

As for the tangible benefits, well, nobody outside MS understands exactly how the numbers add up. As far as I can tell, all the profits from the Halo franchise, and essentially every other game MS was ever involved in (including Mass Effect), are already figured into the loss of 2 billion.

 

[lee_michael_f92]

I think the main focus of Microsofts assets should be focused on the software side... Making windows bigger and better for other OEMs. The same could be said with office and cloud integration.


Sent from my iPhone using Tapatalk

 

[rmeigs]

Why do you guys keep saying this? Any source? Everything I see disputes that claim? Profits were only made during some of the more recent quarters. Overall, Xbox 360 lost about 2 billion (give or take a few hundred million) and was a drag on the company. That is not a modest success.

While I believe you are generally correct, one needs to note that Microsoft has never released profit numbers for Xbox, only revenue numbers. They have released profit numbers for the Entertainment and Devices Division ? a positive numbers finally this last quarter -- and they have stated that strong Kinect and Xbox sales drove the division revenue up 55 percent. Bottom-line, we really don't know how much profit Xbox makes or losses.

 

[Quinn FitzGerald]

xbox a cash cow.... Perhaps if you only count the quarters they gained money? They went into the 360 (when it launched) with over 2 billion in the red on the xbox brand, They have not made over 2 billion revenue on it, as a matter of fact they have lost approx 2.5-3 billion on it (I expect eventually they will be about even with the Xbox 360 by the time it is fully retired). note: 2 billion is a conservative number, 4 billion is likely the highest it was when the 360 was launched, to be truthful, it was probably somewhere in between.

EDIT: As people have pointed out, we don't know exactly how much the xbox has "'made' or lost" but the 360 sure did not give Microsoft enough money to turn the division to profit. Live started a HUGE turning point in terms of revenues, but __As a brand__ it has yet to turn a profit if you include its entire lifetime.

EDIT2:

I wonder what Microsoft's long-term strategy with Xbox is...

Take control of the living room. This opens up HUGE opportunities to make money selling media, and such.

EDIT3:

lol, yeah, any division at Sony that earns anything at all is automatically one of their most profitable divisions. The rest of Sony is basically going down the drain.

Anyway, any source for that? Everything I read states the opposite, namely that overall, the PS3 lost Sony even more money than the Xbox 360 did for MS. Sony expects the PS4 to do better than the PS3. Just like MS, they claim to be aiming for a razor thin profit, but it appears that neither MS nor Sony are factoring in marketing costs (only manufacturing cost and sales price). If true, both are headed for another opening round of losses for 2014.

The PS3 lost __ALMOST__ all the money that the PS1 and PS2 made. While the PS3 as a console was terrible for Sony in terms of profits, the Playstation Brand is still positive (barely)

 

[a5cent]

While I believe you are generally correct, one needs to note that Microsoft has never released profit numbers for Xbox, only revenue numbers. They have released profit numbers for the Entertainment and Devices Division – a positive numbers finally this last quarter -- and they have stated that strong Kinect and Xbox sales drove the division revenue up 55 percent. Bottom-line, we really don't know how much profit Xbox makes or losses.

I agree that we don't have exact numbers. I would disagree if you are saying we are absolutely clueless. I'm saying only that the Xbox division overall is not profitable. That is all I'm saying. You agree with that too. Every analyst agrees with that. I'm unable to find a single article claiming otherwise. I'm not providing any exact numbers... a two billion loss, give or take a few hundred million, is the closest we can get.

Revenue is a tricky thing... strong Xbox and Kinect sales driving revenue up 55% just means a lot of people bought an Xbox. It doesn't say anything about profitability. That news in 2008 would have meant staggering losses. The only reason the Entertainment and Devices Division is able to post a modest profit is because it includes a few billion from Android IP licencing. Allegedly, that is the only part of the Entertainment and Devices Division which is profitable.

 

[Marco Gomes1]

Can't say I would miss any of those though I think its an idiotic move in the long run. What's the point of the so called "One Microsoft" then?

 

[Chris Wayne2]

Hope they don't, but I understand why those shareholders want that, Microsoft should think more as a global company, I have a long list of features and services that are or have been only available in the US where Microsoft struggles the most, one of the most annoying ones is how bing works outside the US, also I haven't heard anyone here in Mexico saying something like "bing it!", not a single clue of bing rewards, xbox video has a very poor catalogue here, windows 8 is very confusing for the costumers in the stores. I really hope Satya can see beyond what Ballmer did and fix this.

Oh and by the way, Microsoft should have bought Motorola for using it to improve WP in the US, I believe more people in the US respect and like Moto as a name than Nokia.

 

[unstoppablekem]

They would never get rid of Xbox.

 

[xchange]

You don't have to take my word for it. I provided two references supporting my claims (this and this). All you need to do is look at them. Outside of this forum, none of that is controversial. I asked you to provide a single reference supporting your opposite claim, but you provided none. Telling. No? Like I said, the articles you read aren't disagreeing with me. You simply fail to understand the difference between annual profitability and overall profitability. For some reason you aren't able to acknowledge that point.

Omg you have a gigantic attitude problem lol. Sorry for your whatever. Cya

 

[Jas00555]

I think the problem is that these investors are short-sighted. Assuming the Xbox division isn't profitable, the conversation should switch from "should we kill it?" to "how can we make the Xbox profitable?".

 

[3earnhardt3]

Xbox, regardless of profitability, should not ever be sold off/shut down. It generates positive mindshare, which is very valuable for a company that has a history of being pure evil.

 

[rockstarzzz]

Xbox, regardless of profitability, should not ever be sold off/shut down. It generates positive mindshare, which is very valuable for a company that has a history of being pure evil.

Pure evil? What company donates as much as MSFT?

 

[dkediger]

Yeah, don't get the pure evil part at all. Microsoft has never hidden their agenda. Well, maybe the NT switcheroo with IBM, but evil?

 

[anony_mouse]

Pure evil? What company donates as much as MSFT?

Bill Gates contributes a lot of money to charity, but that's his money, not Microsoft's. Genuine question - does Microsoft donate a lot of money to anyone?