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Microsoft Investor Wants To Fire Ballmer And Sell Xbox Division
- Thread starter Syphon Filter
- Start date
No shit sherlock. How did you calculate that?
That..that is a lot of cash down the drain. So if this happens and by happens if ever,this would be the end of xbox?
starwarsfan541
Banned
Nintendo doomed my ass.
I could see Samsung buying it.
Personally, I'd be curious what would happen if they sold the studios (and accompanying IPs) and hardware seperately
w1gglyjones
Member
Control units with kinect eye tracking
gaming_noob
Member
Korean tech is so hot right now. I'd support a Samsung console.
Depends on who buys it.
Claude Kenni
Member
If you read "ValueAct, a $2 billion Microsoft investor with a 1% stake in the company" and laugh that they want to make changes because they only own 1% you need to think a little harder.
Reagan's BR
Banned
Sell it to Valve or Apple.
Randolph Freelander
Member
Econ 101. You have 1 dollar to invest. Investment A returns 25%. Investment B returns 15%. Both are profitable. You take Investment A. The opportunity cost of B is that your return is lower than if you took A.
It doesn't matter if the Xbox division is profitable. If it's not the maximum possible return on investment (and there are a lot of factors at play here, it's not exactly cut and dry), then it's a negative proposition.
InsaneZero
Member
Investors care about the potential for growth in the company more than its ability to drive profits for the fiscal year. Right now Nintendo doesn't look like it's able to become more profitable than it is right now, which is why its stock price is lower than before.
IsntChrisL
Member
I feel like I see this sort of story pop up every year or so. It's yet to happen.
I'm surprised so many gaffers are unaware of how much money the Xbox division has lost Microsoft though.
I'm surprised so many gaffers are unaware of how much money the Xbox division has lost Microsoft though.
Samsung Xbox. I would be OK with this.
Did no one tell this braindead fella that when you do a long term investment, and have alreayd written off billions of dollars to estabilish it, then you do not start to conspire against that project within the company when it is starting to generate profits, you know...
... I mean, what the fuck?
What Econ level is this? You launch a longterm project, eat up 7,000,000$ over a course of a few years. You arrive at today, and you have brand power, a huge marketshare, and you have a rolling subscription service that generates profits. What do you do with such a project?
Because if I were to turn this into an "econ 101 problem", the question would be: would you sell such a project at this point, or would you buy this project, since its estabilishment costs has already been paid off by its previous owner?
... I mean, what the fuck?
What Econ level is this? You launch a longterm project, eat up 7,000,000$ over a course of a few years. You arrive at today, and you have brand power, a huge marketshare, and you have a rolling subscription service that generates profits. What do you do with such a project?
Because if I were to turn this into an "econ 101 problem", the question would be: would you sell such a project at this point, or would you buy this project, since its estabilishment costs has already been paid off by its previous owner?
Maximilian Kolbe
Member
So what "Investment A" to replace Xbox?
starwarsfan541
Banned
This has been going on for years. MS entertainment division is a money hole.
Systemwarrior
Member
Apple iBox?
Randolph Freelander
Member
Cat videos on youtube.
you thought people were joking when they said 1998 was the best year in gaming?
all numbers prove this.
Shouldn't be a surprise. They took some lumps with the first two consoles.
Doesn't mean XBOne will lose money and I think there's zero chance that Microsoft would ever dreamcast it, but that doesn't mean they won't pull the plug on the gaming division after this gen.
From a gamer's POV, it should be a concern. If somebody doesn't pick up the pieces and provide adequate competition, we're going to see a $900 PS5.
Doesn't mean XBOne will lose money and I think there's zero chance that Microsoft would ever dreamcast it, but that doesn't mean they won't pull the plug on the gaming division after this gen.
From a gamer's POV, it should be a concern. If somebody doesn't pick up the pieces and provide adequate competition, we're going to see a $900 PS5.
I'm sure you have a lot more investment experience than they do... I guess you never had a financial or management class.
Extra millions in all their enterprise stuff like Windows Server, Office, stuff like that.
InsaneZero
Member
Probably a larger investment into improving Windows, breaking into the mobile sector, expanding beyond PCs, etc.
Something to improve the current health of their main businesses.
TheExecutive
Member
and the pretrade share price was up 9%... havent been able to look at it this afternoon.
Read up on the concept of sunk costs. What you've already spent has no bearing on future decision making when you're looking at where to allocate resources
The Abominable Snowman
Member
Wasn't it Ballmer who suggested that Xbox should be spun off into its own brand and company, with Microsoft as a majority shareholder?
I distinctly remember that news story. But MS I guess decided to lump it in with Zune and mobile/TV losses at the time.
I distinctly remember that news story. But MS I guess decided to lump it in with Zune and mobile/TV losses at the time.
That article is wrong. http://data.cnbc.com/quotes/MSFT/tab/8]Gates doesn't have anything like 25%.
It's also worth noting that those big mutual fund holders are all index funds, that don't have a choice in how much MSFT they keep. I'm not sure how they handle their proxy voting.
EatinOlives
Member
Microsoft can turn around their gaming division much more easily than they can turn around Windows. Windows is an enormous project designed around desktop PCs, which in the general world of computing is having a bit of an identity crisis. They didn't gear Windows 8 toward tablet usage because they had fuck all to spend their money and time on, they did it because that's the space where computers are moving. Windows, however, is still inherently a desktop OS and would be extremely difficult to enter the more mobile computing space with it.
With the gaming division it's simple: gain consumer goodwill by stopping the nickel-and-dime policy. Given their past numbers it's not like even working anyway. Stop with the ridiculous extravagant ad campaigns that are a giant money sink. Stop shutting down (Ensemble) or eviscerating (Rare) perfectly competent developers because they don't what to do with them or they make one game with lukewarm sales. Stop killing your own reputation with idiotic bullshit like the always-online, Kinect-required, TV! TV! TV! approaches on your console. Stop antagonizing your own PC space and actually release games on it. Stop trying to force people to buy your new Windows OS by arbitrarily locking out older OSs from stuff like new DirectX versions. Stop stupid mistakes like releasing Games for Windows Live and acting surprised when nobody wanted to pay a subscription for it, then letting it rot for years until the service shuts down taking tons of games with it. Spend money actually being productive with new games and IPs instead of wasting tons of cash preventing the competition from getting content by moneyhatting timed exclusives/DLC.
But I doubt these investors are actually thinking about these things in those terms. More than likely they're pissing themselves over the bottom line and demanding sweeping action with little regard of the fact that the gaming division is one of the more promising ventures from Microsoft. What else are they supposed to focus on? Bing? Windows Phone? Surface? Those are more promising than the gaming division? Please.
With the gaming division it's simple: gain consumer goodwill by stopping the nickel-and-dime policy. Given their past numbers it's not like even working anyway. Stop with the ridiculous extravagant ad campaigns that are a giant money sink. Stop shutting down (Ensemble) or eviscerating (Rare) perfectly competent developers because they don't what to do with them or they make one game with lukewarm sales. Stop killing your own reputation with idiotic bullshit like the always-online, Kinect-required, TV! TV! TV! approaches on your console. Stop antagonizing your own PC space and actually release games on it. Stop trying to force people to buy your new Windows OS by arbitrarily locking out older OSs from stuff like new DirectX versions. Stop stupid mistakes like releasing Games for Windows Live and acting surprised when nobody wanted to pay a subscription for it, then letting it rot for years until the service shuts down taking tons of games with it. Spend money actually being productive with new games and IPs instead of wasting tons of cash preventing the competition from getting content by moneyhatting timed exclusives/DLC.
But I doubt these investors are actually thinking about these things in those terms. More than likely they're pissing themselves over the bottom line and demanding sweeping action with little regard of the fact that the gaming division is one of the more promising ventures from Microsoft. What else are they supposed to focus on? Bing? Windows Phone? Surface? Those are more promising than the gaming division? Please.
fastford58
Member
I love posts like these. Because you know better than someone who has 2 billion wrapped up in an investment.
i doubt it. the next playstation will be a service that you can subscribe to using a playstation box or one of many other sony devices. eventually they'll be implemented into sony televisions themselves without the need for extra hardware.
It's been 13 years and they haven't made any ROI from xbox yet. This generation will determine if they stay in the console business.
HocusPocus
Member
Maybe Apple will buy the "Xbox Brand" or Valve. Might be attractive to them.
dragonelite
Member
Death of console gaming?
SporeCrawler
Member
Obligatory samsung saturn post
It was a fucking magical year!!!
Conciliator
Banned
Now this is a video game movie I could get into. Russell Crowe could play the head of ValueAct. DRAMA.
Various Artists
Banned
I really dont think it would be all that bad really. They have a ton of money to throw around right now and have a proven reliable hardware and chip manufacturing chain.
Yes, more on that:
http://www.reuters.com/article/2013/07/19/net-us-microsoft-valueact-idUSBRE96I14920130719?type=companyNews
I think ValueAct was just the tip of the spear.
ValueAct actually wants to dump most consumer stuff so that would include Windows Mobile.
Mattrick. Ballmer was against it.
Unless of course you want to get stuck with a gigantic money sink of a project.
Beer Monkey
Member
Don't know if that is accurate but if true than it's understandable that investors would say this.
Edit: Beaten
1) Charts from your ass.
2) There isn't a Gaming division. The segmented financials don't even break out the huge losses from stuff like Zune and Kin. It's ALL under 'Entertainment'. Xbox is the best thing going in that division now.
Penguins&PolarBears
Member
Don't know if that is accurate but if true than it's understandable that investors would say this.
Edit: Beaten
It's understandable that investors would want to get rid of a division that became consistently profitable after Don Mattrick took control? LOL.
Bing is just now starting to become profitable after billions in losses. All the investors who were calling for MS to sell Bing are now looking like idiots. When your business becomes profitable that is not the time to get rid of it.
This topic is such a fanboy wetdream. Xbox is strategically important in fighting Google and Apple with services like Skype, Bing, Xbox Music & Video, Skydrive, etc.
Without the Xbox foothold in the living room all of Microsoft services take a hit. Apple promotes FaceTime over Skype, Google promotes it's search in the living room over Bing, etc. Not going to happen.
The majority of NeoGAF does not have a business-, finance-, or management-related background, I suppose.
That depends on various factors. Such a general statement is outright wrong, a lot of private equity firms would like to have a word with you.
CassidyIzABeast
Member
Yeah drop Xbox and free up some cash for Kin 2 development.
thunder_snail
Member
And it shall be called the Sxbox.
Randolph Freelander
Member
What Econ level is this? You launch a longterm project, eat up 7,000,000$ over a course of a few years. You arrive at today, and you have brand power, a huge marketshare, and you have a rolling subscription service that generates profits. What do you do with such a project?
Because if I were to turn this into an "econ 101 problem", the question would be: would you sell such a project at this point, or would you buy this project, since its estabilishment costs has already been paid off by its previous owner?
Newsflash: Companies drop profitable ventures all the time, and sunk costs are just that: sunk. They're gone. Yesterday's news. If the prospects for the future aren't as favorable as other options, you go with the other options. Well-run companies aren't in the habit of throwing good money after bad, or choosing the lesser course for a profitable future, all things held equal. Investors would not let them get away with it.
Sony isn't big enough to buy something like the Xbox Division. Price would be around 20 billion $.
Amazon-Box would be more logical. Either way they are planing to release their own console.
Don't know if that is accurate but if true than it's understandable that investors would say this.
Edit: Beaten
God fucking damned.
Investors/stockholders don't make these kind of comparisons.
They ONLY care about future performance, and for a smaller part current performance.
From that graph they only care about the last two bars, and actually only the last one and the way it is moving... and the reasons for that move... (FY11, FY12)