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Microsoft Investor Wants To Fire Ballmer And Sell Xbox Division
- Thread starter Syphon Filter
- Start date
InvaderZimmer
Member
Not sure how a 1% shareholder gets this kind of press.
http://www.carbonated.tv/technology...is-retirement-speech-to-13000-employees-video
He is the same old crazy guy.
According to the article, he owns 4.5% but is sellig them at a linear rate so he has no shares by 2018, so he's sellig 0.9% of Microsoft per year. If the 3 investors have 4% between them that would likely be more than gates a couple of months before the new CEO takes over.
I imagine the two scenarios for this are the investors are big and have spoken to other investors about it and leaked the article to give other investors a chance to think about it, or someone let it slip early and sweet Billy is about to smack some investors clean outta there.
davepoobond
you can't put a price on sparks
I think it's an interesting situation because if the top level guys at the company begin to turn their backs on the Xbox division at large it could very well be the last one. Not because it loses money or underperforms necessarily but for whatever reason they feel like it isn't a part of the company they think they should keep.
I can see someone like Samsung or a group of electronics makers buying up the hardware and licensing the Xbox os from Microsoft as they continue to develop it. It would maybe make it like a steam OS thing in that case
freenudemacusers
Member
probably because 1% = one of the largest shareholders in the company
fallen_dawn
Member
Hugh Buelow
Member
ThoughtsOfSpeaking
Banned
Honestly, just trying to piss off Bill gates is probably the best news the Xbox division has had.
If he has to drop what he is doing and MAKE services work, alot of people are gonna be left with bloody faces, including Sony.
But it all depends how much he truly believed in Ballmers vision. While he launched the Xbox, im not sure he would been above killing the 360 or at least leaving the RROD till the Xbox S was announced. The 1 Billion spent on fixing the problem did not feel like a bill gates move.
That said, on the inverse, I dont think he would of killed the courier tablet, which if made well would be doing alot better than the surface is now.
If he has to drop what he is doing and MAKE services work, alot of people are gonna be left with bloody faces, including Sony.
But it all depends how much he truly believed in Ballmers vision. While he launched the Xbox, im not sure he would been above killing the 360 or at least leaving the RROD till the Xbox S was announced. The 1 Billion spent on fixing the problem did not feel like a bill gates move.
That said, on the inverse, I dont think he would of killed the courier tablet, which if made well would be doing alot better than the surface is now.
w1gglyjones
Member
What's certain is that is XB1 doesn't succeed within a year or two, there will be problems for that division.
It's also not just one investor anymore. The newest report is that the effort is led by 3 top investors owning ~5% of the company.
So the thread title is now misleading, but I don't yet have the capability to post a new thread.
Damn, 5%... that's a lot of Microsoft....that puts a spin on things, especially considering gates is contractually obligated to lower his 4.5% annually. where as these investors could purchase more, if they believe they have a strategy to create profit, it would be a profitable investment.
statham
Member
I'm sure the richest man in the world could persuade other investors.
badcrumble
Member
Having Samsung buy the Xbox division would be horrible. It ought to stay American, IMO - let Apple buy it or something.
Keep the corruption of the chaebols out of videogames, plz.
Keep the corruption of the chaebols out of videogames, plz.
ThoughtsOfSpeaking
Banned
Yeah. He is alot more underhand than ballmer, but at the same time alot of his tatics would not fly in todays business world. Way too much regulation and clued up tech press (yes, compared to the 80's they are very clued up no matter how much they write like idiots)
TheKastorian
Member
Nailed it. Also, Bill Gates is the largest individual share holder (with 5%) so the voice of a 1% investor is still pretty significant.
ThoughtsOfSpeaking
Banned
The only thing American about Microsoft is The location of its main campus. There isnt really such a thing as an "American" or "Japanese" Company anymore. These are global entities.
Yup, Samsung's QC is very poor
And their after-sell Customer Service is pretty bad. It will be an another nightmare after red ring of death.
w1gglyjones
Member
Why would he even bother? He's busy in philanthropy and it slowly giving away all his money. Does he really have that much of an interest in MS Devices when others want to change course?
Well gates owns 4.5% and this new coalition has 5% between them.
I believe they would need a majority vote of the board to do so, but I am basing my information
Gates has been selling off his MS stock. Since he left MS as CEO, he has been selling off 80 million shares each year. If he continues to do this he won't have any MS stock in 2018. There is nothing to suggest he won't keep selling his stock like this. He puts all of the money he makes from selling his stock into his foundation, and has the goal of putting 95% of his wealth into his charity.
The push to get rid of Gates from investors now is so that can get a new CEO (and Chairman) in place without Gates dictating it, seeing as he has less than 5 years left as being a major shareholder.
Even massive, global corporations like MS have a culture. MS is still very much an American company, culture wise. And it has only been under Kaz that Sony seem to be reducing how Japanese they are. Under Stringer, he predecessor, Sony was still very much a traditional Japanese entity, with all the decisions coming from Tokyo.
miDnIghtEr20C
Banned
Cracks me up seeing the talk about getting rid of the Xbox brand.
The console has almost won 3 straight years in a row of being the most sold console in the place MS is the strongest and thee (imo) most important place in the world for your stuff to sell and "be hot" in.
Why in the hell would they get rid of the xbox and all those billions Live is making them. Ha... I don't get that.
The console has almost won 3 straight years in a row of being the most sold console in the place MS is the strongest and thee (imo) most important place in the world for your stuff to sell and "be hot" in.
Why in the hell would they get rid of the xbox and all those billions Live is making them. Ha... I don't get that.
Chobel
Member
Simply because the investors believe Xbox division isn't making enough, the money that goes to Xbox division can be invested in more profitable businesses like Azure, Office...etc
ThoughtsOfSpeaking
Banned
Because those billions are drop in the bucket compared to the Money microsoft makes and only barely cover the loss incurred at the start of the generation. Not to mention the overall enterainment and services division is not profitable.
Best post in this thread. Give this man the "gets it" award.
No it is not. The post sounds like microsoft is just having b2c products. There arent many companies around that can match them in b2b services and products.
And the b2c part doesnt mention the growth from xbox to xbox 360. they achieved to be on par with sony in the 2nd gen.
plus, it doesnt mention that their phone business is growing...
Ms did a lot of things wrong in the past, but your quoted post is very short minded.
EmptySpace
Banned
uh...1% of microsoft (or any multi-billion publicly-traded company)is huge.
bill gates owns 4.5%. put that into perspective. that puts the 1% shareholder easily at the top 20 shareholders of microsoft.
The main reason why the Xbox division isn't making enough is because of the RROD fiasco. Which was one of their first venture into the hardware world. I guess they could count it as experience expenses. :lol
Looking ahead though, even if they finish 2nd next gen, XB1 will be profitable from the get go. Add Xbox live to that and the numerous services they will offer, plus accessories and games licensing and publishing. They're in for a hefty profit.
Actually untrue. The original Xbox lost a lot of money as well.
Imperfected
Member
I really doubt they'd be interested, anyway. Korea has a very interesting culture built up around their PC bangs that makes marketing a home console (and Live) in Korea far more challenging than most other first-world countries. I would say of all the companies out there, Samsung probably has the least faith in the future profitability of console gaming, as they probably work under the assumption that most cultures will move away from living room gaming toward either the Korean or Japanese models.
I think Amazon might be an interesting possibility. To them it would probably be more of a 'content delivery platform' than a game console, but then again that seems to be where Microsoft was heading, anyway.
Iacobellis
Junior Member
Xbox 360 has only turned into the blockbuster it is because of the missteps Sony made in the early PS3 days. You saw how Microsoft fared against the PS2, and now you're seeing how the PS4 is getting nearly four times as many preorders as the Xbox One.
Xbox has always been seen as an American console, an the Xbox One is pushing this even further. Targeting one out of the three major markets is a bad move, especially if the product ultimately fails or never meets expectations.
ThoughtsOfSpeaking
Banned
Actually its due to the combined 3 billion R&D cost of the 360 and the 4 billion R&D cost of the OG xbox.
an Investment point of view for context:-
http://www.fool.com/investing/gener...w-console-reason-enough-to-buy-microsoft.aspx
They just bought Nokia...making them the first in forever to actually buy anything from Nokia.
miDnIghtEr20C
Banned
I don't know man. I'd be proud of having those stats in the USA. It was a huge surprise they did Sony the way they did here in the US.
Unless of course people predicted Xbox to win all these sales numbers for years in a row.
Chobel
Member
It doesn't matter how much profitable is the Xbox division, It won't ever be as profitable as other MS businesses like OS, Azure...
Investors, the ones that wants Gates out, only care about money.
Some Nobody
Junior Member
Because the "billions" (lol really?) they make off Live pale in comparison to the money they sunk into developing the original XBox, plus they sold the 360 at a loss, and to give you an idea of generally how much money they randomly choose to throw away, they invested 100 million dollars into developing the XBox One controller. No, that's not a typo. It's not 10 million, or one million. It's full-on, Dr. Evil-style 100 million dollars. Yeeah.
In fact, there was a graph posted earlier in the thread showing how their losses/earnings from year to year, along with a combined line that showed how much money they had made once you added all the years they turned a profit.
...It was still down by quite a bit.
This doesn't mean they will actually DROP the XBox, but it DOES mean its not something people should laugh off.
Imperfected
Member
Manufactured and sold for a profit =/= profit generated as of the first sale.
They sunk hundreds of millions of dollars into R&D on the controller alone, to say nothing of the cost of developing the actual console and and Kinect 2.0, or how much they're going to drop into marketing the thing. They have a long way to go, sales-wise, before they make back their initial investment on the X-Box One. As a matter of fact, even selling the console "at a profit" they would probably never break even on that alone - it's down to their cut of game sales and increasingly the profit-generation from "services" (X-Box Live Gold, X-Box Fit, etc.) to due the actual heavy-lifting of turning the project into a revenue generator.
The way economics of scale function, they really cannot afford to sell less than fifty million of these things unless they have tremendously good attach rates with regard to software and services. The initial investment would be too difficult to recoup if sales numbers were low, regardless of whether or not the box is selling for a "profit" at the shelf price.
miDnIghtEr20C
Banned
I guess I disagree. IMO being the most popular in the USA is pretty much the biggest it gets. I mean ya, being huge in Europe is grand and all, but then why do they want to make it big in the USA market? ( i'm not talking consoles here.. i'm talking music, movies all of it.)
Also for me, interesting you say it was Sony that made the Xbox the blockbuster it was. It couldn't be because of the great online play and games it had/has. I don't know. Maybe you're saying MS and the Xbox has a chance again to take the lead then since Sony made early mistakes (and that was while the console was out) and MS has made mistakes (before the console has even launched)
So maybe like in dumb and dumber.. You're saying there's a chance.
Nobody cares about sunk costs. They've already been accounted for and forgotten. Investors only care about future profits and growth
KoopaTheCasual
Junior Member
Pride has absolutely zero to do with it. It's all about investments and returns, and some of the board feels that hardware is a wasted effort for MS, when they can put more resources behind Cloud services and Windows.
GoofsterStud
Member
Let's just hope the PS4 doesn't win by the land side many are assuming it will.
We need competition.. If the Xbox One falls to far behind I think that this will be the first to go. :-/ I really don't see anyone else willing and capable of carrying the console for the next few years.
What a conundrum.
We need competition.. If the Xbox One falls to far behind I think that this will be the first to go. :-/ I really don't see anyone else willing and capable of carrying the console for the next few years.
What a conundrum.
ThoughtsOfSpeaking
Banned
But when those sunk costs show a precedent, they are weary of an upcoming generation.
Thinking as an investor and not a a gamer, I'd be more proud of making money to be honest.
Dehumanizer
Member
Carlos Slim it's not the richest anymore:
http://latino.foxnews.com/latino/mo...-title-as-worlds-richest-person-from-mexicos/
Gates got this throne back