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

[Angry_Mushroom]

Of course... why don't we get rid of WP8 while we're at it.

 

[rockstarzzz]

Satya said that Microsoft is all about Cloud and Mobile. So most probably we will be seeing more Microsoft Cloud Services, and more Microsoft Mobile Hardware.

No. He said Mobile and Cloud. Mobile first and then cloud.

 

[bilzkh]

I wonder what Microsoft's long-term strategy with Xbox is... Will it remain as hardware or will it evolve/transition an online platform that streams games (as well as music, videos, original content, etc) across platforms? I suspect, especially with the "Mobile First. Cloud First" strategy, Xbox may be heading down that path.

Bing is integral technology for Microsoft, they won't sell it.

As for Surface, it's a hedge against the OEMs. With Sony out of the PC business, we have one less design-centric and innovation-for-innovation's sake contributor to the PC industry. Others, e.g. HP, Acer and Lenovo, are spreading their eggs across Chrome and Android. The Surface is a necessity. Sure, Microsoft need not go overboard with design and R&D, perhaps stick to COTS and more basic (but still compelling and distinctive) designs. Alongside the current Surface tablets I'd add a desktop box and a standard touchscreen ultrabook clamshell.

 

[Jazmac]

Which is why neither one was named CEO.

 

[Moiz Mian]

Which is why neither one was named CEO.

I don't think most board members are even experienced enough to run a tech company. They are usually from the financial/economics background. You ideally want someone with an engineering background to run a software/technology company

 

[Reflexx]

I don't think most board members are even experienced enough to run a tech company. They are usually from the financial/economics background. You ideally want someone with an engineering background to run a software/technology company

Business background and management experience is way more important than having an engineering background. Most brilliant engineers would be horrible CEOs.

However, if you have someone with great business experience, great management skills, creative thinking AND engineering prowess... well, then that's pretty darn good.

 

[ajst222]

Honestly, it would be stupid to do either one of those things. Just...why? Microsoft has the resources to work on many things at once, plus they all serve a purpose in the whole unification "OneMicrosoft" thing.

Posted via the WPC App for Android on my BlackBerry

 

[rmeigs]

Don't judge all "shareholders" on the minority.

Very true. I was reading the comment in the context of the OP, i.e., "two Microsoft Shareholders." To me they sound like your "minority that wants a quick buck and don't care about the future of the company."

 

[a5cent]

lol, aren't all those divisions making money currently?

Sorry, not gunna happen Xbox has been a cash cow.

XBOX is interesting in that it does make money

Sorry guys. That the Xbox earns MS money is incorrect. MS and Sony both sell their consoles below cost (initially), so they lose money on every sale. Some of that money is earned back over time, primarily with (a) subscriptions and (b) the cut both companies take on game sales. Unfortunately, that hasn't been enough. Profits are really only earned at the tail end of each console's lifecycle, once the hardware becomes considerably cheaper to manufacture. By that time however, the next generation usually isn't too far off, so the money loosing cycle starts anew.

That is why the previous generation lasted as long as it did... both companies required almost a decade to earn back at least some of the money they spent when the products launched. During the last few years, the Xbox 360 has been profitable, but over its entire lifetime, the Xbox 360 has lost MS billions of dollars (source). With the XB1 the cycle has now started anew, and dispite MS' goal to break even, that doesn't appear to be happening (take that with a grain of salt... reports on the web are contradictory).

Nobody outside MS has the exact numbers, but most analysts estimate that XB1, WP and Skype are all money loosing endeavors, together incurring losses between 2.0 and 2.5 billion annually (one of many possible sources). MS covers this up by factoring in revenue from Android licensing, which is how they are able to claim that all divisions are profitable.

Those loss incurring endeavours is what investors are unhappy about, some more so than others. Investors calling to spin off Xbox is almost a tradition at this point... it's been happening for years. This was the last thread on the same issue.

Like everyone else here, I think selling off Xbox would be a tragic mistake.

 

[5150 Joker]

Why would selling off the Xbox division be a mistake? It really detracts from the core focus of Microsoft of being an Enterprise, PC desktop/laptop and mobile devices company. All Xbox One does is add brand recognition to a bunch of teenagers from whom very little revenue is derived. As WP has proven, Xbox live on the phone is next to worthless so really the whole living room trojan horse goal has fizzled out. At this point MS would be well served to get rid of Xbox and sell it to whoever wants it so they can get back to focusing on PC + mobile gaming.

 

[Laura Knotek]

Why would selling off the Xbox division be a mistake? It really detracts from the core focus of Microsoft of being an Enterprise, PC desktop/laptop and mobile devices company. All Xbox One does is add brand recognition to a bunch of teenagers from whom very little revenue is derived. As WP has proven, Xbox live on the phone is next to worthless so really the whole living room trojan horse goal has fizzled out. At this point MS would be well served to get rid of Xbox and sell it to whoever wants it so they can get back to focusing on PC + mobile gaming.

What about attracting those teenagers toward the rest of Microsoft's ecosystem? It might be better if those users decide to stay with Microsoft's 'professional' products/services once they are adults, rather than letting them choose Android/Apple instead.

 

[Jas00555]

Why would selling off the Xbox division be a mistake? It really detracts from the core focus of Microsoft of being an Enterprise, PC desktop/laptop and mobile devices company. All Xbox One does is add brand recognition to a bunch of teenagers from whom very little revenue is derived. As WP has proven, Xbox live on the phone is next to worthless so really the whole living room trojan horse goal has fizzled out. At this point MS would be well served to get rid of Xbox and sell it to whoever wants it so they can get back to focusing on PC + mobile gaming.

I think one of these shareholders is lurking in the forums (;

Seriously? I hope you're kidding. Entertainment is HUGE. Sure, maybe at launch they'll take a loss, but by the end of this Sony will be the only one barely making money back. The way that Microsoft has positioned the X1 as the all in one entertainment console makes it a cash cow for them (and if they produce good content, one that I'll be happy to fund). PC sales are declining and they have to find other sources of revenue. I really like Microsoft's products and I don't want to see them become the next IBM.

 

[xchange]

If MS actually wake from their slumber they should make more of an effort to get Office out on better selling platforms than their own

 

[a5cent]

Why would selling off the Xbox division be a mistake? It really detracts from the core focus of Microsoft of being an Enterprise, PC desktop/laptop and mobile devices company.

That the Xbox detracts from MS' other efforts isn't really an argument, because every division detracts from every other division. That argument gives you a reason to get rid of any division you don't like. The far more interesting question is how likely those investments/detractions are to pay off down the road. Google is also working on a gaming console, so clearly MS isn't the only one who thinks the home entertainment console might become far more important in the future.

 

[xchange]

The PlayStation is also one of Sony's more profitable divisions

 

[ntice_521]

Xbox has been a modest success for Microsoft (xbox360 turned a small profit) but where's the synergy? Meanwhile almost everything else loses money. So I can understand the wall street desire to stop throwing money away on long shot investments. But with the new CEO being an insider and Gates and Ballmer around, it's not going to happen. That's good for us consumers.

 

[a5cent]

The PlayStation is also one of Sony's more profitable divisions

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.

 

[a5cent]

Xbox has been a modest success for Microsoft (xbox360 turned a small profit...

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.

 

[xchange]

It was on Flipboard a couple of days ago but I just tried to find it and lost it. The article had something to do with Sony getting out of the PC business and other divisions that are struggling, to focus on the ones that are doing well, and the PlayStation was among those mentioned. Likewise, the Xbox is a healthy division of MS that it would be a mistake to get rid of.

MS reallllly needs to get rid of some of the old farts on their board of directors. They're the ones who insist on old practices of locking things down instead of propagation. Deciding to keep office off of android and ios in order to protect windows mobile devices was major stupidity. Even now the recent steps to finally get it on other platforms is half arsed and come with conditions.

 

[a5cent]

It was on Flipboard a couple of days ago but I just tried to find it and lost it. The article had something to do with Sony getting out of the PC business and other divisions that are struggling, to focus on the ones that are doing well, and the PlayStation was among those mentioned. Likewise, the Xbox is a healthy division of MS that it would be a mistake to get rid of.

Okay. In that case the article was either poorly written, or it considered only the most recent financial period and you guys don't understand the difference between annual profitability and overall profitability. I linked to a document that explains the situation for the Xbox. If you need more Google it yourself. There are dozens of articles explaining the overall financial failure Xbox has been so far...

So no, the Xbox division is not healthy. The finance guys would have no reason to get rid of it if it was. For the PS3 the overall losses were even worse...

Understanding that point is essential to making sense of why spinning off the Xbox division is even an issue.