LiveFromKyoto
Member
Considering they have the weakest first party and their model is based on throwing giant money hats at the wall until something sticks, no.
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Microsoft Investor Wants To Fire Ballmer And Sell Xbox Division
- Thread starter Syphon Filter
- Start date
Considering they have the weakest first party and their model is based on throwing giant money hats at the wall until something sticks, no.
starwarsfan541
Banned
Yea, probably this or they spin it off with a stake in the new company.
Couldn't see that new company surviving long though.
Despite what these investors might want, I still don't see it happening. Either way, we'll find out once the shareholders vote on November 19th. The most recent rumours suggest that the board are again backing Ballmer and Gates. If that happens, and Ballmer and Gates get re-elected, then I don't think they'll be spinning off the Xbox business anytime soon and Microsoft will continue forward as a devices and services company.
Captain Tuttle
Member
I'd be alright if they spun off the division, I think the brand is still strong in spite of what many on here would have you believe.
Udham
Member
Bit irrelevant:
seeing the Surface write-off and its immediate consequences, Kinect 2.0 RnD write-off seems a difficult decision for execs to make.
So following the investor pressure if ED has to be reshaped, xbox division will be in tough spot.
Again, despite Xbox making money since 2008, ED not being profitable...has to be due to the failures on WP. Yet MS going with WP and buying out Nokia was vague. Now the entire ED is just an over bloated unit, so even Xb1 doing run of 2008-2012, ED as whole will be still loss making.
seeing the Surface write-off and its immediate consequences, Kinect 2.0 RnD write-off seems a difficult decision for execs to make.
So following the investor pressure if ED has to be reshaped, xbox division will be in tough spot.
Again, despite Xbox making money since 2008, ED not being profitable...has to be due to the failures on WP. Yet MS going with WP and buying out Nokia was vague. Now the entire ED is just an over bloated unit, so even Xb1 doing run of 2008-2012, ED as whole will be still loss making.
weekend_warrior
Banned
That would be great news, but it seems unlikely given how close we are to the next launch. A company would have to buy the entire division which no one would do since they'd probably be buying more debt then assets.
NotXbox one
Banned
this is bullshit they can not sell the xbox division
please dont sell it
Daffy Duck
Member
Bill Gates to buy it.
tinfoilhatman
all of my posts are my avatar
Who the hell would buy the Xbox division now with with X1 disaster looming, FU for screwing your long time loyal supporters Microsoft.
Well tbh...the situation isn't much better in Sonyville. Remember there are persons that want to split up them up as well.
TouchMyBox
Member
While the consumer division of Microsoft may or may not be ultimately successful, it seems pretty apparent that it's toxic to Microsoft's enterprise core-business.
If XBone is a sucess there will still be a lot for investors to complain about (they're being sold at a loss afterall).
And people wonder why MS feels like they have to charge more for stuff like XBL.
Pretty much anything that is made in the by the division is plowed back into it one way or another. Investing shareholders are sharply against this.
Really the only way I see this working out is if by this time next year, Xbones are flying off the shelves at a ridiculous rate not only to gamers, but to nongamers who want a good skype/cable box like Pachter was talking about. Gamers alone don't have enough money to plow into a corporation's profits.
Pretty much anything that is made in the by the division is plowed back into it one way or another. Investing shareholders are sharply against this.
Really the only way I see this working out is if by this time next year, Xbones are flying off the shelves at a ridiculous rate not only to gamers, but to nongamers who want a good skype/cable box like Pachter was talking about. Gamers alone don't have enough money to plow into a corporation's profits.
No, they'll be profitable from the start, or at least break even. Either way, it's not going to be a 360 type situation where they sell at a huge loss.
Starphoenix
Member
Maybe if they fired Iwata and gave NoA some level of autonomy like the Howard Lincoln days.
Wasn't that also more aimed at the movie side than anything?
Yes. I was more about spinning off Sony pictures.
Depends. It doesn't have to all be sold at once. I'm sure Nintendo and Sony would be interested in a few of the studios/IPs Microsoft owns, and a lot of the R&D could well be moved into the B2B space (Kinect and voice commands for example).
Valve might also be interested if they want to make a name for themselves in the living room.
I follow the line of thinking of these investors. They want Microsoft to become a (relatively) lean, mean Windows/Enterprise/Cloud company. It's not only that their little hardware tangents make almost no net profit; they also give the appearance of sapping focus, investment, and talent from Microsoft's cash cow operations.
KoopaTheCasual
Junior Member
King Tubby
Member
I don't hardly know shit about business, but even if the Xbox division has failed to turn a profit in its lifetime, those losses are over and done with. If it's beginning to turn a profit now that the brand and experience have been built up over the past two generations, it doesn't make sense to get rid of it partially or fully. Am I totally misunderstanding?
Maninthemirror
Banned
Can xbox brand survive independently ? I mean not fully owned by ms but run completely indendently from ms influence and away from shareholder influence
I really doubt it. And if it did, the console would likely be very different. I mean, I don't think an independent Xbox company could spend over $100 million on R&D for a controller like Microsoft did.
It's all about profit as a % of investment, If you can invest 10 billion in xbox and get 11 billion back that's 10% profit, but if you coul invest 10 billion in Azure and get 15 billion back then that's 50% profit, investors want to invest all of the money into the higher return divisions. It's not just making money, it's profit%
LiquidSolid
Member
And it was all over Sony Pictures, not Sony Computer Entertainment. Not even remotely the same.
Maninthemirror
Banned
You do realise cost would go down due to red tape of being such a huge corporation. Just look at valve
The fact that Xbox is already an established brand and the fact that they are either breaking even or profiting on every XB1 makes this a solid 'maybe'. I believe that the Xbox division has been profitable since 2008. I expect 2013 to be in the red due to the R&D costs for XB1, but if they can make the division profitable by 2015, then I will say yes, they can run things on their own.
To be honest, I think the Xbox division is no more equipped to fly solo than the Playstation division is. Many consider the OG Xbox to be a flop. Taking that into consideration, I remember reading that the Xbox division lost like $3 billion over the last 10 years, and that the Playstation division lost even more during the same time span.
As much as we laugh at them, Nintendo is the only company that consistently makes money every year.
Obviously. It was just an example, albeit an extreme one, to show that the entire console would need rethinking. Like I said in my previous post, "if it did, the console would likely be very different". Would people like what that "different" would turn out to be? Would they care if the Xbox brand turned into a mini Nintendo or Valve when they already have the real thing? I don't think so.
Nightengale
Member
Pretty much.
It's tough for some group of investors, who historically has invested in MS as a company that focuses on their core software offerings, with high margins and very focused and lean teams to want to a hardware division of their own.
Regardless of how successful the hardware division may be, unless you're Apple, doing hardware is low-margin, high resource game. And that saps into the company's profitability ratio.
Xbox has cost them closer to 6 or 7 billion. The first Xbox was 4 billion alone. Not sure if that includes Kinect/X1 R&D or RROD billion dollar fiasco.
PanicFreak
Member
Yes there is. The iPhone pretty much killed the point and shoot market for most people. It also killed the standalone music player. There are still some sales in each market but they have had their duck cooked by the smartphone.
The quest for the living room hasn't been solved because no one has ever brought a compelling device that ties everything together (movies, television, music and games) in a package that is convenient to keep running at all times.
One day, it will come and the standalone game console, bluray player, cable box, ipod hook up markets will dry up.
You guys do realize that this is Paul Allen, right? The "investor" is Vulcan Capital, Paul Allen's PE/VC.
Fox Business reporting on this.
http://www.foxbusiness.com/industri...n-off-consumer-business-paul-allen-thinks-so/
And CNBC:
http://www.cnbc.com/id/101162843
http://www.foxbusiness.com/industri...n-off-consumer-business-paul-allen-thinks-so/
And CNBC:
http://www.cnbc.com/id/101162843
Corronchilejano
Member
Ps4 it is.
Daffy Duck
Member
Should people who are looking to buy a XB1 be concerned about this?
If the US gov. could get shutdown then this is possible.
King Tubby
Member
Gotcha. Xbox division is just low in terms of profit relative to their other divisions.
Possibly. Personally, I doubt the Xbox One is going to have much of a long life irrespective of this ordeal. Power woes, under performing sales etc, I think will be bigger reasons for Microsoft to want to move on to the next system sooner rather than later as oppose to offer better longevity of support. My guess is that the Xbox One has a maximum life span of 5 years or less.
It's not happening tomorow, the only real chance of it going badly for someone buying an XB1 is that MS will stop moneyhatting stuff, they'll likely still produce 1st party games and there will be multi plat titles as well as manufacturing and selling the console.
It's extremely unlikely for this to become a huge negative this gen. I'd keep an eye on it but you'll still get games.
Correct me if I'm wrong, but I don't think Vulcan are actually the ones who are pushing Microsoft to do this. The recent bump that this thread received was because Paul Ghaffari (of Vulcan) offered his opinion on the matter, where he simply agreed with ValueAct, who are the real ones with the actual prominent stake in Microsoft. Vulcan themselves (or Paul Allen) aren't actually involved much in this.
As I said in my post that you quoted, it seems that Gates and Ballmer are going to get re-elected. When/if that happens it won't really matter what Vulcan or ValueAct want, it's not going to happen. Ballmer is firmly behind the devices and services approach (and it seems to be working so far), and Gates (who would probably side with Ballmer regardless) wouldn't want to kill off what is essentially his baby in the Xbox.
No, you shouldn't be concerned. There will be no effect for years if ever, no matter how things shake out.
Balmer is leaving in less than 12 months though. re-elected or not.