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Microsoft Investor Wants To Fire Ballmer And Sell Xbox Division

W

witchedwiz

Member
shinobi602 said:
j-jonah-jameson-laughing-gif.gif
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Well duh per se it'a shitty, but if all interested party sums to 25-30% of shareholder quotes.. Sure they can't boss around, but they can be a major pita during shareholder meeting and can indeed influence the firm..
Hollywood conditioned you into thinking that it's all 50% more quotes or scram... That's just for extreme decisions... Revising current 5-10 year plan (key word revising) based on lower then expected revenues and even lower projection is hell, but far from impossibile in reality..
You gotta think this way: 30 wants change, 70 is unknown... Those 30 can force an additional 5% via pressuring and then it's all about the un decided quota.. Rarely a change has a straight 50% approval rate, they normally have around. 30% strong confidenze zone and then it's all about internal interference to bring as much of the "dunno part" to your side as possible...
 
H

Htown

STOP SHITTING ON MY MOTHER'S HEADSTONE
Ty4on said:
That's what doesn't make sense. MS spent billions to make Xbox the brand it has become so why just get rid of it?
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At some point you just have to realize something isn't working. Now, do I think it's a good idea for MS to drop Xbox right now? Nope.

But if they've been at this for over a decade and are still in the red, at what point do you figure it's not worth it?

Compare this to Nintendo, who everyone seems to think is in trouble due to the WiiU, and realize that Nintendo lost money exactly one year out of thirty.
 
J

Joni

Member
AmFreak said:
It is basicly a license to print money, you must be really dumb to kill something like this.
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Except you need to maintain it and make sure people remain subscribed what you need to do with making new consoles which costs money.
 
E

EmreBFG

Member
Is anyone surprised by this? I thought it was well known that one common desire is for Microsoft to split into separate companies, like Windows, Office, Server, Mobile, and Xbox.
 
S

Shiggy

Member
Just because a branch is posting profits, it doesn't mean that you should not sell it. While there was the sentiment of doing it all yourself in the 90s and early 00s, I've worked on different projects where management decided to focus on a corporation's core-business and sell off non-core units, even if they were growing and posting decent profits. Microsoft has a lot of issues at this time and it might not be foolish to concentrate on other units. After all, the Xbox business requires huge investments and a console launch is pretty risky.
 
I

ItWasMeantToBe19

Banned
Ty4on said:
That's what doesn't make sense. MS spent billions to make Xbox the brand it has become so why just get rid of it? I could maybe understand MS selling Xbox and going the IBM route.
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The amount of money invested into the Xbox brand shouldn't be viewed as point for or against continuing the brand, it's irrelevant. If an investor doesn't believe in console gaming's future as the most profitable use of current and future resources (and there are reasons to be skeptical of the Xbox brand in the future), it would make sense for that investor to recommend a sale.
 
M

Mass Effect

Member
DopeyFish said:
Very inaccurate.
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Oh, so you have the correct figures? Can we see them?

Raist said:
http://i.imgur.com/UwdTasL.jpg/IMG][/QUOTE]

It is absolutely amazing that Nintendo has never posted a loss in their entire [video game] history. Except for 2012 that is.

And yeah, the Xbox overall is still in the red. Did they turn a profit during the 360 years? Yes, but it still hasn't recouped the entire endeavor.
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Raven77

Raven77

Member
I work for one of the largest financial data providers in the world and have access to a lot of research, etc. etc.

I can tell you that they have definitely had a steadily increasing revenue stream since 2008 but at the same time, the cost of that revenue has been going up as well.

Somehow their research and development costs have NOT gone up significantly despite the new console and launching the Surface tablets, etc. At the same time their earnings per share EPS has NOT gone up much either which is probably why investors are not happy.


Also, a 1% stakeholder in a company is a huge deal. Don't write it off because it isn't a big number. MS will most certainly evaluate what this investor wants. They basically have to, if the investor were to sell off a large portion of their holdings, it would then trigger a massive sell off of MS stock in the markets and the price would plunge.

I could probably find a research report with info specific to the xbox brand but I would have to try to find it.
 
R

Rad-

Member
starwarsfan541 said:
Looks right to me, it makes sense to sell it piecemeal or kill it.

If there is a lot more investors in the same mindset, it could be very interesting.
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Let's remember that chart includes money sinks like Zune etc so the profit for the later years should be much better than that.
 
G

gofreak

GAF's Bob Woodward
I think we're a couple of steps away from this becoming a real debate.

The article was from yesterday, before Ballmer announced his intention to resign. How might this news affect ValueAct's agenda?

Second, the idea that ValueAct might push for a sale of Xbox is speculation by a different analyst - even if, the article says, he is 'well sourced' with regard to ValueAct's intentions.

The original article highlights some dates by which ValueAct would play any cards, so we'll see what happens, but it's not for sure what their intentions are yet.
 
K

killer rin

Member
Again? Investors try this a couple times every year. They should just learn to grow up. Xbox is here to stay because Microsoft obviously has plans for it in its greater vision. If it wasn't, they would have spun it off years ago after all the losses considering Microsoft tends to drop failing products after a generation or two.

Kusagari said:
I would love to see how bad Microsoft's entertianment division looks when it doesn't have Xbox/Live saving it.
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You wont be able to anyways. The company is restructuring.
 
W

w1gglyjones

Member
gofreak said:
I think we're a couple of steps away from this becoming a real debate.

The article was from yesterday, before Ballmer announced his intention to resign. How might this news affect ValueAct's agenda?

Second, the idea that ValueAct might push for a sale of Xbox is speculation by a different analyst - even if, the article says, he is 'well sourced' with regard to ValueAct's intentions.

The original article highlights some dates by which ValueAct would play any cards, so we'll see what happens, but it's not for sure what their intentions are yet.
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ATLUS should by Xbox
 
M

Maximilian Kolbe

Member
gofreak said:
I think we're a couple of steps away from this becoming a real debate.

The article was from yesterday, before Ballmer announced his intention to resign. How might this news affect ValueAct's agenda?

Second, the idea that ValueAct might push for a sale of Xbox is speculation by a different analyst - even if, the article says, he is 'well sourced' with regard to ValueAct's intentions.

The original article highlights some dates by which ValueAct would play any cards, so we'll see what happens, but it's not for sure what their intentions are yet.
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Oh yeah,just notice that it's over 10 hours ago
 
B

bigmf

Member
w1gglyjones said:
Even IF they wanted to spin this off... who would pay for it? The revenue streams are soo large now that you would need a big company to take it over or secure financing.



lol
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Spinning it off in a public offering would attract a large number of investors, I think. A lot of people would want to get in on the ground floor of XBox corp. or whatever the hell they'd call it.
 
A

apana

Member
Xbox so far hasn't been a profitable venture but what would be the point of dismantling or selling the division now that it is making money? Sony lost billions on PS3. Gaming is a very tough business and requires a lot of investment if you want to be a console maker. Otherwise every tech company would just build a console and ship it out.
 
M

malboroking

Banned
This article is why I think it's funny that people seem to think that MS has so much money that it can just money hat any exclusive that it wants. This is hardly the first time that shareholders have been upset with MS entertainment division, they're already quite upset with the amount that MS has invested with absolutely no net return. And looking at how much it's invested into Xbox One, they're not going to be seeing a net return for a long time. Shareholders could give a shit if the device will be profitable in 5 years, it's very much what have you done for me lately with these people.

And 1% of a huge company like MS is quite a lot, not to mention they hardly the only shareholders who want Ballmer gone.
 
A

AmFreak

Member
Joni said:
Except you need to maintain it and make sure people remain subscribed what you need to do with making new consoles which costs money.
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It doesn't have to cost that much money. Neither Ms nor Sony are repeating the losses from PS360. Live Gold subscriptions alone currently rake in over 1 billion $ per year. They also seem to plan to go cloud only somewhere in the future. So a console could be no longer needed.
 
Z

ZealousD

Makes world leading predictions like "The sun will rise tomorrow"
Raven77 said:
Also, a 1% stakeholder in a company is a huge deal. Don't write it off because it isn't a big number. MS will most certainly evaluate what this investor wants. They basically have to, if the investor were to sell off a large portion of their holdings, it would then trigger a massive sell off of MS stock in the markets and the price would plunge.
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I imagine getting rid of Ballmer and xbox would be even more of a plunge.
 
S

Syntax

Member
Tripon said:
But they won't do that either since MS is using XBox as a trojan horse strategy to get into your living room. Its almost a loss leader strategy as long as its in your house, it has done its job.
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That's what it seems like to me also. But it still doesn't mean it'll get even that far. Perception (and probably numbers on paper) might cause shareholders to view selling the Xbox division as the correct course of action.

Seems like a big if at this point, one which doesn't inspire confidence toward investing in an Xbox console.
 
T

The D Man

Banned
MS used to do really well in B2B solutions and other more innovative companies have really had their way with MS's staple in the past half-decade. I can see why an investor would want to get rid of the Xbox division and have Microsoft focus on enterprise and business solutions, when they focus on it they've generally been very good at it.

So, selling the Xbox division may seem stupid because it's profitable but you have to ask "Would they be more profitable with that money being invested in traditional Microsoft business solutions?"

I think one could make a compelling case that the opportunity cost of pursuing consumer electronics and games is too high to justify. Depending on what happens in the first 12 months of the XB1s lifecycle, we could see the Xbox division splinter away from MS.
 
L

Lagspike_exe

Member
If they attempt to extract maximum value out of MSFT, they could attempt to sell the entire consumer products division and maybe even Bing. And then monetize Office and other products to a full extent. Microsoft's mobile battle is a lost cause.
 
V

Videoneon

Member
In other news, the stock price of Microsoft jumped about 5% on Ballmer's announcement. edit: 7% apparently? maybe things changed since the article I read?

lol

It's boosting the money he's making on the shares anyway. I wonder if he could just sell his shares now.

Rad- said:
Let's remember that chart includes money sinks like Zune etc so the profit for the later years should be much better than that.
Click to expand...

Yeah. I don't see why Microsoft would have bothered with another one if the apparently dwindling margins are not worth it.
 
C

Curufinwe

Member
AmFreak said:
It doesn't have to cost that much money. Neither Ms nor Sony are repeating the losses from PS360. Live Gold subscriptions alone currently rake in over 1 billion $ per year. They also seem to plan to go cloud only somewhere in the future. So a console could be no longer needed.
Click to expand...

Something that far off and fanciful is of no interest to most shareholders.
 
B

bigmf

Member
Also, this is why people can't say that Microsoft has tons of cash and can just spend their way to console supremacy. This 1%er will get a lot of shareholder support if Microsoft starts spraying the cash hose everywhere.
 
C

Commanche Raisin Toast

Member
With how much 'MS paying for exclusives' talk there has been lately and with all of the articles talking about how much xbone is costing the company, I'm really surprised nobody had questioned how much the division is choosing MS as a company compared to other divisions and if it's overall even worth their time.

Xbox can APPEAR to be healthy and successful but I'd they are paying far too much to maintain that then it's not worth it. If the shareholders start jumping on that idea it could be bad news.
 
N

numble

Member
eyekantspele said:
yea but were talking about thousands of people out of jobs. Plus can you imagine the gaming world with just one main system?
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Selling the Xbox division does not mean everyone out of a job and the Xbox no longer available. There's another Washington company that already is planning to launch a console and could snap them up.
 
J

Joni

Member
Also quite important to note: ValueAct has been requesting change and a board seat since last month where they already gained support of another big Microsoft shareholder, Capital Research. They want Microsoft to focus more on their enterprise business instead of consumer, which means their entire smartphone, Surface and Xbox divisions are in 'danger'. ValueAct has also managed to succesfully push for change in companies like Motorola. It is also one of the 20 biggest shareholders in the company.
 
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