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[tearsintherain]

It would make sense at some point for Microsoft to spin out xbox as a seperate company. They could capitalize it with some of their huge cash reserves, which the new company could use to buy Nintendo. Xbox the Company supplies the hardware and OS smarts, Nintendo supplies the good games. Thats my dream, but it probably won't happen until Nintendo crashes and burns with their next console launch.

Keep in mind in the mid 90s Apple was considered a dead company. Michael Dell famously said the best thing they could do is give their cash reserves to shareholders and shut down the company, stock was in the low $20s then. Now the company is one of the top 5 most valuable companies in the world and Dell is almost invisible.

Microsoft is in a similar position now, its almost irrelevant in the world. Yeah everyone runs Windows but nobody really cares about it and its just something you put up with, people are more passionate about their phones and gaming consoles and browsers than their OS. Who knows what the future will bring and if Microsoft can survive and thrive, hopefully they can adapt.

 

[_Clash_]

it's still a strong brand. the product and messaging of said product was the issue. it's easily the strongest thing they have going with younger demos. other than xbox, their entire business is enterprise and older adults buying pcs

Why do they care about younger demographics?

 

[_Clash_]

From what I understand new CEO thinks MS is an office productivity company focusing on cloud for business integration. Executives and students are there market. Like Apple but with an emphasis on office.

Can not imagine a world where Spencer gets a blank cheque book for more than a nice non offensive wind down for the brand. To make the X1 profitable.slow things down whilst they capitalise on live subscriptions. whist they think how to repurpose Halo and Gears.

But if someone can rationalise this for me I'm all ears.

 

[Admodieus]

Why do they care about younger demographics?

Kids grow up and have purchasing power, not only within their own households but in the enterprise.

 

[SPDIF]

It would make sense at some point for Microsoft to spin out xbox as a seperate company. They could capitalize it with some of their huge cash reserves, which the new company could use to buy Nintendo. Xbox the Company supplies the hardware and OS smarts, Nintendo supplies the good games. Thats my dream, but it probably won't happen until Nintendo crashes and burns with their next console launch.

Keep in mind in the mid 90s Apple was considered a dead company. Michael Dell famously said the best thing they could do is give their cash reserves to shareholders and shut down the company, stock was in the low $20s then. Now the company is one of the top 5 most valuable companies in the world and Dell is almost invisible.

Microsoft is in a similar position now, its almost irrelevant in the world. Yeah everyone runs Windows but nobody really cares about it and its just something you put up with, people are more passionate about their phones and gaming consoles and browsers than their OS. Who knows what the future will bring and if Microsoft can survive and thrive, hopefully they can adapt.

Hardly. Depending on what day it is they're either the 2nd or 3rd biggest public company in the world. It might not be relevant to you, but it's certainly relevant to most other people/companies

 

[Sydle]

What long-term strategic importance does the Xbox brand really have for MS now?

Its not as cheap for MS to compete due to a smaller first party.

Why would they double down on Xbox as a product now their vision was rejected?

From what I understand new CEO thinks MS is an office productivity company focusing on cloud for business integration. Executives and students are there market. Like Apple but with an emphasis on office.

Can not imagine a world where Spencer gets a blank cheque book for more than a nice non offensive wind down for the brand. To make the X1 profitable.slow things down whilst they capitalise on live subscriptions. whist they think how to repurpose Halo and Gears.

But if someone can rationalise this for me I'm all ears.

Nadella acknowledged that gaming is the biggest source of revenue in the mobile industry and said that the Xbox division allows them a unique opportunity. He specified that when he says mobile it means taking your experience with you across devices, no matter the OS.

If you refer back to their leaked Xbox 720 doc you'll notice that they had Xbox as a platform agnostic service by 2015 that allowed users to take their games anywhere, picking up their game just as they left it, as they move across devices. That doc also suggested that they would use some type of AR device to bring gaming into the real world, so it's not accurate to say that owning the TV was the end game when we have evidence suggesting it went beyond that in various ways.

All they really pulled back on over the last year was the emphasis on TV and Kinect, but they're still developing TV apps. They still have some powerful core IP, a community of millions of gamers, a world-class online service, and a CEO that wants their games in the cloud. If they continue growing their IP over the next few years as they transition to a PaaS it could bring in big revenue.

I don't think Nadella would have approved a $2.5 billion dollar acquisition if he had intentions to wind the division down. I also don't think he'd have Spencer talking at the Windows 10 Consumer Experience event in January if Xbox wasn't an important part of the Windows 10 strategy long term. We'll learn more soon.

 

[SPDIF]

From what I understand new CEO thinks MS is an office productivity company focusing on cloud for business integration. Executives and students are there market. Like Apple but with an emphasis on office.

Can not imagine a world where Spencer gets a blank cheque book for more than a nice non offensive wind down for the brand. To make the X1 profitable.slow things don whilst they cqpitalise on kive subscriptions. whist they think how to repurpose Halo and Gears.

But if someone can rationalise this for me I'm all ears.

Nadella has previously stated that Microsoft's core businesses are Office, Windows and the cloud. However, he considers other ventures such as Xbox and Surface as very important aspects of the company, as they can help draw new customers into the Microsoft ecosystem. He's actually pretty committed to Xbox:

I also want to share some additional thoughts on Xbox and its importance to Microsoft. As a large company, I think it's critical to define the core, but it's important to make smart choices on other businesses in which we can have fundamental impact and success. The single biggest digital life category, measured in both time and money spent, in a mobile-first world is gaming. We are fortunate to have Xbox in our family to go after this opportunity with unique and bold innovation. Microsoft will continue to vigorously innovate and delight gamers with Xbox. Xbox is one of the most-revered consumer brands, with a growing online community and service, and a raving fan base. We also benefit from many technologies flowing from our gaming efforts into our productivity efforts – core graphics and NUI in Windows, speech recognition in Skype, camera technology in Kinect for Windows, Azure cloud enhancements for GPU simulation and many more. Bottom line, we will continue to innovate and grow our fan base with Xbox while also creating additive business value for Microsoft.

 

[_Clash_]

Nadella acknowledged that gaming is the biggest source of revenue in the mobile industry and said that the Xbox division allows them a unique opportunity. He specified that when he says mobile it means taking your experience with you across devices, no matter the OS.

If you refer back to their leaked Xbox 720 doc you'll notice that they had Xbox as a platform agnostic service by 2015 that allowed users to take their games anywhere, picking up their game just as they left it, as they move across devices. That doc also suggested that they would use some type of AR device to bring gaming into the real world, so it's not accurate to say that owning the TV was the end game when we have evidence suggesting it went beyond that in various ways.

All they really pulled back on over the last year was the emphasis on TV and Kinect, but they're still developing TV apps. They still have some powerful core IP, a community of millions of gamers, a world-class online service, and a CEO that wants their games in the cloud. If they continue growing their IP over the next few years as they transition to a PaaS it could bring in big revenue.

Thanks for those 2c. I understand these specifics can be difficult to nut out.

Also difficult to imagine some sort of cross-play/ streaming using Xbox as an agnostic device making it as much more than a neat feature.

 

[GreyOcelot]

Why do they care about younger demographics?

Kids grow up and have purchasing power, not only within their own households but in the enterprise.

exactly. brand awareness long-term

 

[Tripon]

Microsoft made a shitload of mistakes with XB1, coming this close to creating a console nobody wanted. That they not only acknowledged their mistakes, but acted on and largely fixed them within a year, is very impressive and showed a lot of modesty. But it was no doubt costly, and probably a few close to the project saw their ego and pride taken down a peg or two, so it's really not at all surprising that we've seen the XB1 team reshuffled so drastically since launch.

The vision of XB1 was ambitious, but simply wrong for the market it was trying to woo, because it just didn't exist. MS was never going to sell a new console to people wanting a living room entertainment box, particularly when several very good ones were already on the market. They may start to chase that market again when more units are out there in the wild, but for now, they need to chase gamers, pure and simple, and they're doing a very good job of that right now.

This is what I never understood about the original plan for XBox One. Nobody was going to buy a $500 device to be their media server. Roku, chromcast, whatever were already providing that option for hundred of dollars less.

 

[_Clash_]

Nadella has previously stated that Microsoft's core businesses are Office, Windows and the cloud. However, he considers other ventures such as Xbox and Surface as very important aspects of the company, as they can help draw new customers into the Microsoft ecosystem. He's actually pretty committed to Xbox:

Reading between the lines of his comment,

Xbox isn't part of the MS core brand according to his statement.

 

[disastermouse]

It would make sense at some point for Microsoft to spin out xbox as a seperate company. They could capitalize it with some of their huge cash reserves, which the new company could use to buy Nintendo. Xbox the Company supplies the hardware and OS smarts, Nintendo supplies the good games. Thats my dream, but it probably won't happen until Nintendo crashes and burns with their next console launch.

Keep in mind in the mid 90s Apple was considered a dead company. Michael Dell famously said the best thing they could do is give their cash reserves to shareholders and shut down the company, stock was in the low $20s then. Now the company is one of the top 5 most valuable companies in the world and Dell is almost invisible.

Microsoft is in a similar position now, its almost irrelevant in the world. Yeah everyone runs Windows but nobody really cares about it and its just something you put up with, people are more passionate about their phones and gaming consoles and browsers than their OS. Who knows what the future will bring and if Microsoft can survive and thrive, hopefully they can adapt.

I can't think of two companies in consoles since consoles were a thing that have as opposite ideas of what video games are than MS and Nintendo.

 

[Sydle]

Thanks for those 2c. I understand these specifics can be difficult to nut out.

Also difficult to imagine some sort of cross-play/ streaming using Xbox as an agnostic device making it as much more than a neat feature.

The Xbox 720 doc had the 2015 value proposition of the brand as having the latest and greatest games where ever you go, but never needing to upgrade hardware again. I agree that it's hard to imagine how it works given where we are today, and seeing as it's MS we're talking about here they'll probably take a gen or two to get it right.

 

[SPDIF]

Reading between the lines of his comment,

Xbox isn't part of the MS core brand according to his statement.

That's right it's not. No reading between the lines required, since he makes that pretty obvious. That doesn't mean that he (and MS as a company) aren't committed to it however. I think he makes that pretty clear in the part that I quoted.

 

[QuikNez]

Reading between the lines of his comment,

Xbox isn't part of the MS core brand according to his statement.

They are not core, but are necessary, why?

1. Brand awareness - particularly with the youth and the home. Microsoft has been losing brand awareness and overall appeal in the retail sector for years to Google and Apple - XBOX was the only front gaining market share in the retail space until recently. To me, this is a fight for relevance for MS and is more important today in this consumer driven economy than ever before
2. Diversity - the classic "don't put all of your eggs into one basket," if MS can turn the operating margin around through cost cutting, as we've seen, and consumer value proposition, then a profitable business will stay, so long as the opportunity cost of redeploying capital is not materially greater in other lines of business accounting for goodwill and the qualitative value drivers
3. Potential Value - Netflix provides a good analogue, and Sony is onto something with PSNow (A juiced MS-XBOX Arcade) - the future is a catalog of platform agnostic games - the returns for old and new IP can be very lucrative
4. Synergy - XBOX does provide a lot of synergy for MS to deploy their other core lines to a different market segment - i.e. Windows 10, Phone, OneDrive / Azure, MS game studios, etc.

Boom taste it.

 

[Einbroch]

Xbox is still an incredibly strong band. When characters in movies/shows/media talk about videogames, it's still always "My Xbox" or "Let's play some Xbox".

I remember when it was Nintendo, then PlayStation. Xbox is in the mindshare and is still very valuable.

 

[Sobriquet]

I swear he must have a Bing Alert set for anything XBO related on GAF.

fixed

 

[GreyOcelot]

The Xbox 720 doc had the 2015 value proposition of the brand as having the latest and greatest games where ever you go, but never needing to upgrade hardware again. I agree that it's hard to imagine how it works given where we are today, and seeing as it's MS we're talking about here they'll probably take a gen or two to get it right.

it's more or less the same concept as PSNow. games as a service on all of your devices

 

[sora87]

Yusuf Mehdi and Major Nelson still need to go.

Yes. Can't stand either of them.

 

[Sydle]

it's more or less the same concept as PSNow. games as a service on all of your devices

Yep. I am actually a little surprised (maybe I shouldn't be) that Sony beat MS to a deal like the one with Samsung TVs.

Personally, I'm looking forward to a future where proprietary game consoles are dead.

 

[_Clash_]

They are not core, but are necessary, why?

1. Brand awareness - particularly with the youth and the home. Microsoft has been losing brand awareness and overall appeal in the retail sector for years to Google and Apple - XBOX was the only front gaining market share in the retail space until recently. To me, this is a fight for relevance for MS and is more important today in this consumer driven economy than ever before
2. Diversity - the classic "don't put all of your eggs into one basket," if MS can turn the operating margin around through cost cutting, as we've seen, and consumer value proposition, then a profitable business will stay, so long as the opportunity cost of redeploying capital is not materially greater in other lines of business accounting for goodwill and the qualitative value drivers
3. Potential Value - Netflix provides a good analogue, and Sony is onto something with PSNow (A juiced MS-XBOX Arcade) - the future is a catalog of platform agnostic games - the returns for old and new IP can be very lucrative
4. Synergy - XBOX does provide a lot of synergy for MS to deploy their other core lines to a different market segment - i.e. Windows 10, Phone, OneDrive / Azure, MS game studios, etc.

Boom taste it.

Hopefully it let's Spencer have a blank cheque book to create all the relevance and kudos possible so they can stream the hot stuff to surface pro's for years to come.

How much he gets to spend for market and mindshare will be telling.

 

[tringworldso]

fixed

Lmao

 

[CoG]

It would make sense at some point for Microsoft to spin out xbox as a seperate company. They could capitalize it with some of their huge cash reserves, which the new company could use to buy Nintendo. Xbox the Company supplies the hardware and OS smarts, Nintendo supplies the good games. Thats my dream, but it probably won't happen until Nintendo crashes and burns with their next console launch.

The Xbox brand would have died several times if not for Windows and Office sales subsidizing it. Do you think they could have pulled off the holiday price drop without Microsoft's warchest to back it?

 

[QuikNez]

Reading between the lines of his comment,

Xbox isn't part of the MS core brand according to his statement.

Hopefully it let's Spencer have a blank cheque book to create all the relevance and kudos possible so they can stream the hot stuff to surface pro's for years to come.

How much he gets to spend for market and mindshare will be telling.

Like in any firm, lines of business that have success will get more responsibility and backing (resourcing).

I am thrilled that the Surface Pro 3 is gaining traction - it deserves it, hands down blows the doors off anything in the market, Apple products included (sorry fans - just my opinion) - writing this response on my MBA.

Given the above, the XBOX slim / XBOX VR allegedly being designed by the SP3 team, Satya''s hard-on for the cloud, Window's 10 platform harmonization, MS's continued deep pockets, I think MS and XBOX have a tremendously bright future - that said, Sony has done a outstanding job with the PS4, the amount of planning and forethought for the platform is really staggering (simple UI, Hardware, SharePlay, PSNow, PS+, morpheus), so MS has their work cut out.

 

[HariKari]

I'm not one to cheer for people to lose their job, but Mehdi still being with MS is sort of emblematic of everything that's wrong up there.

 

[Apparition]

I don't think anyone can singlehandedly conquer the living room. If it was that easy, Apple or Google would have done it already.

 

[Gamezone]

Im not getting the impression that Xbox is something Major Nelson loves to do anymore.

 

[wachie]

Why do they care about younger demographics?

 

[Dynomutt]

It would make sense at some point for Microsoft to spin out xbox as a seperate company. They could capitalize it with some of their huge cash reserves, which the new company could use to buy Nintendo. Xbox the Company supplies the hardware and OS smarts, Nintendo supplies the good games. Thats my dream, but it probably won't happen until Nintendo crashes and burns with their next console launch.

Keep in mind in the mid 90s Apple was considered a dead company. Michael Dell famously said the best thing they could do is give their cash reserves to shareholders and shut down the company, stock was in the low $20s then. Now the company is one of the top 5 most valuable companies in the world and Dell is almost invisible.

Microsoft is in a similar position now, its almost irrelevant in the world. Yeah everyone runs Windows but nobody really cares about it and its just something you put up with, people are more passionate about their phones and gaming consoles and browsers than their OS. Who knows what the future will bring and if Microsoft can survive and thrive, hopefully they can adapt.

No disrespect but I just threw up in my mouth a tad bit. Nintendo is great because of it's Japanese identity and unique gaming culture. No American companies prior to Xbox have been able to have a console reach such high success rates. Xbox had the money and resources to build the infrastructure to truly succeed.

As a brand Xbox is strong and well respected. But please please God do not let MS, Disney, Apple or matter of fact anybody touch Nintendo or its beloved characters.

 

[Devilgunman]

Xbox is still an incredibly strong band. When characters in movies/shows/media talk about videogames, it's still always "My Xbox" or "Let's play some Xbox".

I remember when it was Nintendo, then PlayStation. Xbox is in the mindshare and is still very valuable.

Problem is when you see someone on the media says that, they refers to the 360. Also those brand recognition mostly come from US media, where the 360 was the lead, but in the global market it's different story.

 

[barit]

So it was Spencer the gaming guy who was responsible for winning NPD November and not all the ridiculous price cuts and BF bundles ? Okay Verge if you say so

 

[EatMyFace]

Says a lot about the lack of a long term vision for the platform. Every single thing they've done with XB1 has been reactionary. Who knows if they even have a plan for the platform at the moment. They're probably waiting to see how VR is received on console.

 

[EatMyFace]

Im not getting the impression that Xbox is something Major Nelson loves to do anymore.

He's a PR mouthpiece who is basically forced to game excitement for a product he may not Luke. Worse thing is how that product is heavily scrutinized by gamers making his job at doing PR very difficult.

 

[pelican]

MS have a new CEO who is slowly but surely molding the company to the business he wants.

Not really that surprising.

 

[Jackson]

The Xbox One was supposed to be the first step towards a living room revolution — it was supposed to run Windows apps, every console was supposed to be a dev unit, and deep interactive TV integration was the next big step — but there's been virtually no progress on any of those fronts since the console's bumpy launch, and the people who championed that vision are now mostly gone.

Because the guy behind that plan left to run Zynga.

 

[_Clash_]

VR is a good point.

Maybe they think they can do it better than anyone?

Or reactive market watching? VR and MS will be an interesting story.

Kudos if they're on at the ground level to be leaders.

 

[Yoshi]

I take offence at the notion that the original vision was something bigger, instead of something worse.

It definitely was a bigger stinker. I somehow miss the option to run Windows Apps (potentially allowing for phone games to run on Xbox One? If not, then scratch that, I'm not interested) and every Xbox One being a dev-kit, but other than that, for all intents and purposes fire everyone who was in any way supportive of the always-online-crap and never employ them again. They are toxic to video games and should never have a say in console development again. The focus on TV and such also was a dumb idea and I'm fine with them dumping personnell that pushed in that direction. Consoles are about
1. games
2. games.
Nothing else and should stay that way. If you want a multi-purpose device, there's a pc or a tablet Microsoft is offering...

 

[foxbeldin]

Yusuf Mehdi and Major Nelson still need to go.

I'm not a big fan of major nelson but he's just doing his job the way he's supposed to.

Yusuf on the other hand, xbox would be better off him.

 

[system11]

It's somewhat refreshing to see people who championed bad ideas getting 'moved' after those ideas fail. Too often things like this are allowed to roll downhill.

 

[Percy]

Good that the incompetence at the top has started to be cleaned out, but guys like Mattrick have already done their damage and they have left the Xbox brand a mere shell of what it once was.

 

[scitek]

Maybe because they saw the Xbox platform as something beyond games? They clearly misjudged the timing, as well as how information travels in the social media era, but Microsoft clearly wanted to go for an all in one entertainment device, as opposed to a games platform first.

It's hard to tell what will happen. Look at handheld. No one could have predicted how quickly mobile gaming and smartphones/tablets would completely take over that market.

It seems as though they weren't content with just being a good console maker or being #1 in North America though. Which is a shame. You see this is in a lot of industries now. Look at HP a few years back. Cancelled the touch pad, closed WebOS and said they wanted to leave the PC industry.

It really wasn't hard to predict a machine focused on TV when traditional TV-watching is on a steep decline wouldn't have succeeded.

 

[BokehKing]

I don't understand the Major Nelson hate at all. What is he supposed to do that he isn't doing?.

Dial it back, that's what he needs to do

 

[GVA1987]

Xbox is still an incredibly strong band. When characters in movies/shows/media talk about videogames, it's still always "My Xbox" or "Let's play some Xbox".

I remember when it was Nintendo, then PlayStation. Xbox is in the mindshare and is still very valuable.

Brand recognition can mean a LOT to a company. Just think how many millions companies pour into advertising each year.

 

[Phat Michael]

I fully believe Major Nelson doesn't even play or like games and he just has some sort of high-paying acting spokesperson gig.

I have him on my XBL. He plays games and broadcasts.

 

[Prine]

Why would you work there?

How old are you?


Back on topic, Phil doing the lords work.

 

[Come With Me]

Well, I can't say that I am surprised. The initial reception was rather poor and not so popular with gamers. It's understandable that Microsoft wants to correct their mistakes and clean up some bad apples and try for a fresh look.

 

[ThoughtsOfSpeaking]

For MS? Uh...

Anyone who would turn down a job from Microsoft is nuts, even more so in today's economy.

How old are you?



Back on topic, Phil doing the lords work.

Its always hilarious when jokes go way over peoples heads on this site.

PSA: Its a Sweet billy reference.

 

[Jigorath]

The old guard is gone. The Age of Phil has begun.

 

[Prine]

So it was Spencer the gaming guy who was responsible for winning NPD November and not all the ridiculous price cuts and BF bundles ? Okay Verge if you say so

Well of course, who signs off on these deals? Who sits down and forms a strategy with makerting dept to turn the tide, understand the climate and strike when the time is right? Who is involved during meetings for branding and the long terms strategy of that brand from now to the next business year ??? Come on, ask yourself these questions. If you've worked in any software/hardware company the top guys are involved before final decisions are made.

Its always hilarious when jokes go way over peoples heads on this site.

PSA: Its a Sweet billy reference.

I assume context is from another thread? Sorry I don't frequent GAF as much as you.

 

[Percy]

The old guard is gone. The Age of Phil has begun.

Kind of a shame Phil Spencer was originally party to the problems that the outgoing executives created in the first place really... and worse that he seems determined to preserve some of the more distasteful policies that persist from that period like the indie dev parity clause even in the face of universal opposition to it.

Its always hilarious when jokes go way over peoples heads on this site.

PSA: Its a Sweet billy reference.

Defense first, thinking second.