Ploid 3.0
Member
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Microsoft Investor Wants To Fire Ballmer And Sell Xbox Division
- Thread starter Syphon Filter
- Start date
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Joe Shlabotnik
Banned
You sell when you can convince someone to buy it for more than you actually think its worth, and when you think you can find a better use for the money. Profit or loss is tangential.
thanks genius try reading the post i responded to
Broken Joystick
At least you can talk. Who are you?
I'll be upset if this happens, yeah MS is most commonly seen as a greedy company but they did some good with the Xbox and 360 (One remains to be seen).
I wonder who would legitimately fill the gap they leave, Apple?
I wonder who would legitimately fill the gap they leave, Apple?
Lagspike_exe
Member
The most amusing part of all this was that a few years ago, a lot of people were saying that there might not even be PS4 if Sony continues bleeding money so hard. Fast forward to 2013, even Daniel Loeb doesn't want to attack Playstation, while Xbox gets to be a prime target for sell off in an activist push. How things have changed.
Beer Monkey
Member
I have already explained exactly why the data being tossed about in this thread is complete bullshit.
Randolph Freelander
Member
The thing you're missing is that resources are indeed finite, even for the biggest companies. And there comes a point where spending a dollar to make 10 cents is not worth it, if your target rate of return is 15 cents. Give that dollar back to your investors (dividend, stock buyback, etc.) and keep going for those higher rates of returns.
Remember, profitable companies get killed all the time on the stock market. Why? Because profits aren't rising quick enough, aren't at the right margin, aren't at previous levels of growth. Investors don't care that your product makes money. They ask if it is making enough money.
Here is where I bow out and say I am not qualified to suggest that Xbox isn't making enough money, or what Microsoft could do if they weren't doing Xbox. Obviously, the investment group in the OP have stronger and more informed opinions on this.
starwarsfan541
Banned
No, Gates only has 4-5%.
Considering a lot of investors and market analysis folks agree, this is very fun to watch.
Oh so Sony and Nintendo are one system now? Good to know.
starwarsfan541
Banned
It is quite amusing, I would love it if the hardware section goes nowhere and the studios get sold off one by one.
I am more educated than you, if you were just a fraction as educated as I am, we could discuss something. But your lack of education is understandable, I guess.
Reading on this guy's background (Jeff Ubben, the head of ValueAct), it's pretty clear he wants MS to focus on B2B/Cloud/Enterprise. When asked about the consumer business and threats to that business he literally answered 'who cares?'.
I think if this guy did get into the MS board it might be worse for Xbox to stay than to go.
I think if this guy did get into the MS board it might be worse for Xbox to stay than to go.
Miles Quaritch
Member
What's with investors these day.
Sony investor wants to get rid of the gaming division, MS investor wants to get rid of the gaming division.
Sony investor wants to get rid of the gaming division, MS investor wants to get rid of the gaming division.
dcx4610
Member
The problem with stuff like the Xbox One, especially at the start of a new console cycle is that it costs the company a boat load of money upfront with R&D, then you sell your console at a loss for years and years before hoping to make a tiny profit for another couple.
Investors don't see making a few million in profit after the initial costs upfront to be very successful.
Incoming Samsung Xbox.
Investors don't see making a few million in profit after the initial costs upfront to be very successful.
Incoming Samsung Xbox.
The Cartographer
Member
Grasshopper Manufacture of course.
Getting rid of Xbox makes more sense for Microsoft than getting rid of Playstation does to Sony.
Microsoft is still a high margin company making large profits. Segments which underperform, produce slim margins or even (as has been the case often for the Xbox division) produce losses is relatively bad. By comparison, Sony as a whole company runs razor thin margins or losses, so another division doing that isn't necessarily a weight around their neck.
I suspect neither will happen, of course. I just wanted to make it clear why this discussion isn't as absurd when talking about MS as it is when taking about Sony, even though in the recent past the Microsoft's EDD has significantly outperformed Sony's Gaming division.
Microsoft is still a high margin company making large profits. Segments which underperform, produce slim margins or even (as has been the case often for the Xbox division) produce losses is relatively bad. By comparison, Sony as a whole company runs razor thin margins or losses, so another division doing that isn't necessarily a weight around their neck.
I suspect neither will happen, of course. I just wanted to make it clear why this discussion isn't as absurd when talking about MS as it is when taking about Sony, even though in the recent past the Microsoft's EDD has significantly outperformed Sony's Gaming division.
Loeb didn't want to get rid off PlayStation. He mainly wanted to get rid off Sony Music and Sony Pictures, stuff that doesn't do hardware.
Randolph Freelander
Member
My hunch, and thanks for digging into it, was that this guy was thinking of the business market, thinking Microsoft should double down on it because there are certainly profits to be made (and protected) in the business space. He also might see this war for the living room to be a losing proposition, much like a bunch of us armchair, unqualified gamer analysts have also wondered.
Sinthor
Gold Member
So in other words...a totally irrelevant comparison?
Just giving you a hard time. But seriously, you have to compare the same divisions. Otherwise you could compare say the Windows division to Sony's TV and display panel division. It's gotta be apples to apples and in this case, comparing the company's as a whole against each other just doesn't hold a lot of relevance for the topic of discussion.InsaneZero
Member
Man, this is getting exciting. Microsoft is at a crossroads where the possibility of selling off the Xbox division is actually quite possible, and is being asked to do so by those that have significant sway in the company.
The gaming industry as a whole seems to be on the verge of being completely turned on its head with shocking new developments.
The gaming industry as a whole seems to be on the verge of being completely turned on its head with shocking new developments.
Its hard to make money selling high-end consoles at a loss.
Is this data bullshit?
http://venturebeat.com/2011/11/15/the-making-of-the-xbox-part-2/
The graph was posted in reference to ValueAct's claim that the Xbox has not made money over its lifetime. If you have the figures to prove otherwise, please post them.
Maximilian Kolbe
Member
That just even worse
Yeah, I don't think that actually spent 100M on that thing.
popcorn.gif indeed
This report was out before his announcement.
And if the OS division doesn't make more profit, it will be their last os?
Where were those investors at the XBox or 360 era?
Where were the Sony investors at the PS3?
You also talk about investors as if they were one unified voice.
Unless they are the majority investors basicly can't do shit.
Those generalizations are just worthless.
starwarsfan541
Banned
Exciting times
popcorn.gif
Who would love it if Sega got Age of Empires and Nintendo got Rareware back.
popcorn.gif
Who would love it if Sega got Age of Empires and Nintendo got Rareware back.
So in other words...a totally irrelevant comparison?
Yeah I knew my comparison wasn't going to be very good lol
starwarsfan541
Banned
They were there, they complained a lot, but now other MS stuff is flopping as well.
And no, a minority can do things, they also are threatening to do something if I understand the article correctly.
Of course not, lets just close are eyes and go back to enjoying our multi-million budget games on our consoles that are sold at a loss, and occasionaly complain about dlc and "corporate greed". It cant change, cause that would mean that we no longer get our games.. they wouldnt dare do that to us.
gundamkyoukai
Member
I don't remember any Sony investors wanting to get rid of it gaming division .
For years it has been the media part but i could be wrong .
Either way after what MS did this year to the xbox brand it would be a much harder to sell.
EDIT replace movies with media. .
Beer Monkey
Member
It's incomplete, therefore it is bullshit. It would be really awesome if MS would start segmenting their P&Ls with finer granularity.
Annual Xbox profits and losses for the last 12 years are hidden away, lacking context due to phones and MP3 players and communication tools.
Avinexus
Member
No shit sherlock. How did you calculate that?
This chart is inaccurate. The data shown in this chart is for everything in Microsoft's 'Entertainment & Devices Division', which includes Xbox, Skype, and Windows Phone finances.
Absinthian
Neo Member
Microsoft has over 8,000,000,000 shares, so a 1% share in Microsoft is an investment worth over $80,000,000. They definately have a huge influence on the direction Microsoft goes in the future
Edit:
Oh right... Not paying attention to my math... Microsoft closed today at $34.75 per share, so 1% is around a $3,000,000,000 investment.
Edit:
Oh right... Not paying attention to my math... Microsoft closed today at $34.75 per share, so 1% is around a $3,000,000,000 investment.
starwarsfan541
Banned
I dont know if its even sellable as a whole, but if they broke it up, they could get a lot of money.
But that is perfectly logical. Microsoft is a high margin software company with its toes in marginal businesses that drag down overall margin and profitability. Sony is a zombie company attached to a bank. Sony cannot afford to ditch potentially positive margin businesses while what the rest of the company does remains so low margin.
When you think about it, gaming hardware is kind of an odd fit for Microsoft. Xbox made a lot more sense when the living room was still the center of the universe. Apple fucked that up for sure. Ultimate revenge, lol
starwarsfan541
Banned
Steve Jobs is somewhere laughing hysterically.
gundamkyoukai
Member
That is true .
So you think that WP, Zune and Skype have cost Microsoft $6B at the very least?
Beer Monkey
Member
One phone, the Kin, that was discontinued after two months, was a quarter of a billion dollar write-off. How much was lost on Zune? They aren't saying. How much was lost on other phones and gadgets? They aren't saying. All of this is included in the EDD results with Xbox.
I don't know. Neither do you.