Will Microsoft Sell Off Its Entertainment Division?
An anonymous reader writes "Forbes analyst Adam Hartung has predicted that Microsoft will sell off its entertainment division, which includes Xbox, in the coming years. He even goes so far as to list Sony or Barnes & Noble as potential buyers. Lets forget how crazy this sounds for a moment and focus on the reasons why Hartung believes such a sale will happen. It basically comes down to Windows 8, and how poorly it is selling. Combine that with falling sales of PCs, the Surface RT tablet not doing so great, the era of more than one PC in the home disappearing, and Microsoft has a big problem. The problem not only stems from the PC market not growing, but because Microsoft relies so heavily on Windows and Office for revenue. With that in mind, Hartung believes Steve Ballmer will do anything and everything to save Windows, including ditching entertainment and therefore Xbox."
I cannot believe this is getting posted here. I know Slashdot hates Microsoft but this is the equivalent of me saying that Apple will sell off the iPad because the iPhone didn't sell as well as they wanted it to. Or something like that.
This is the dumbest thing I've heard on this site yet.
Last i read
The online part is the money loser along with mobile
And why would Sony buy it? They already have a console
I've not understood MS's strategy around gaming for years now. Don't get me wrong, I owned an original Xbox and liked it, I own a 360 now and like it a lot - but I've never understood why MS would choose to move into the console market.
I'd have thought that there's much more of an incentive for them to make Windows work as a gaming platform. After all, what's one of the biggest reasons that people shy away from switching OSes? The games. Running modern commercial games consistently and in a relatively hassle-free manner is - and has for quite a long time - been one of the things you can do on Windows that you just can't do on other OSes.
So they launch the original Xbox which is basically - at launch at least - the console that runs games you'd otherwise have expected to be focussed on the PC (Halo and Knights of the Old Republic were both from genres that the PC utterly dominated at the time). Then the 360 comes along and - for quite a long time - if the only reason you stick with Windows is gaming... then why not just buy a 360?
And then as we get to the late-cycle point where PC gaming really starts to outstrip what the consoles can do (even on a bargain-bucket PC), they go and foul it all up with Windows 8.
It's like MS is determined to take one of its biggest advantages in the OS market and hammer it into oblivion.
They make periodic efforts to "get serious" about the PC as a gaming platform, but these tend to be inconsistent, badly thought through and horribly unsuccessful. Games for Windows Live, anybody? With Valve looking at the PC gaming market in a distinctly predatory manner, MS should be seriously worried.
And while it's not such a major matter, they've also made some really odd choices with their internally developed games. First they shut down the Flight Simulator series - a brand with immense loyalty from its enthusiast following - abandoning the market to competitors. Then they try to come back with Flight - a free-to-play-pay-to-actually-do-anything monstrosity that discards the series's historic strengths.
Selling off their entertainment division? At the point where they're finally making a profit from console gaming? It would fit...
If that's the case then Uncle Fester is completely around the bend. They have one division that is a leading player in a rapidly developing market, and that is Xbox in a market where entertainment is starting to be delivered by IP network and the cable companies are starting to cave or become irrelevant. Just at this moment Fester decides to sell. Holy Jebus Gates, fire that idiot.
If Windows is in trouble because of market shrinkage (and that's most certainly the case at the consumer level, not really at the business level), then how does decreasing Microsoft's diversification (which is what I always assumed the XBox division was all about) help things? Sure, it might make some quick cash, but then Redmond is still stuck with the same problems.
I think Microsoft has got an uphill climb with Surface, but while it may not be winnable in traditional Redmond terms (90% for MS, 10% for everyone else), I don't see why in the medium term it couldn't at least grab some modest market share. Beyond that, we already know they're preparing a version of Office for the iPhone, so Microsoft always has a few cards like porting major software packages to competing environments, up its sleeve.
I don't buy this. Not yet. Maybe in five years when Microsoft is in some sort of severe structural decline, then maybe they start selling off divisions, but while the situation is hardly in their favor right now, it's hardly desperation mode at Redmond.
The world's burning. Moped Jesus spotted on I50. Details at 11.
I'm just a lowly user, but I predict that the next big move that MS makes is to get rid of Steve Ballmer. And the second big move that MS is going to make is release Windows 8 Pro Classic -- which will simply be Windows 8 without Metro bolted on! They have no choice if they want to keep their business customers happy!
Article not's there anymore. Not surre how long it's been gone, but it's cute to see how many comments there are in spite of this.
The best thing about a boolean is even if you are wrong, you are only off by a bit.
... I don't give a damn. Instead of selling Windows 7 and 8 at reasonable prices, you're turning Windows 8 into 200$, after some time in the 30-40$ (source. You'll die, slowly, because of being greedy and short-sighted. In my opinion.
Microsoft is more likely to sell off the Windows Os side and keep the entertainment division. XBOX exists because they knew that the future of Windows depends on it being in your living room. They are supposed to be using the xbox to sell Windows in the same way Apple uses the iPad and iPhone OS to sell Macs.
With that said, Microsoft is doing a terrible job at this, but the strategy depends on tying entertainment to OS so selling it off would be illogical.
Forbes has vanished the article. Here's a copy on the author's blog.
http://rocknerd.co.uk
Betteridge's law of headlines
The best part is that Forbes (apparently) pulled the article because (apparently) it was just too much wild speculation.
#naabhaprzrag, #sverubfr-000, #agi-fcbafberq, negvpyr[pynff*=' negvpyr-ary-'] { qvfcynl: abar !vzcbegnag; }
Why on earth would they sell that off? Makes absolutely no sense. This type of reporting is totally and utterly a pile of crap. Must be a slow news day and this guy has an article quota to keep.
"Thanks to the remote control I have the attention span of a gerbil."
I cannot believe this is getting posted here. I know Slashdot hates Microsoft but this is the equivalent of me saying that Apple will sell off the iPad because the iPhone didn't sell as well as they wanted it to. Or something like that.
No, I see distinct differences between your comparison. I wasn't able to read the article before it was pulled but let me address your bad analogy. While you're right that this "analyst" needs to pull his head out of his anal cyst, your comparison is quite laughable and let me tell you why. Traditionally Microsoft's software has been a cash cow. You want the latest Office? You want the latest Windows? Pay up. Everyone. For each computer. Now. And while that's faltered before, Windows 8 has been subjected to a lot of bad PR (both warranted and unwarranted) as well as actually having poor sales.
Now, let's look at their entertainment division. With the initial Xbox release, that division was a sinkhole of money. Like, literally a burn pile for billions of dollars. But Microsoft was patient because they had other stupid insane routes of income with which to fill the tire fire that was the Xbox. Even when they launched the second incarnation -- they fared much better but still they took a loss on the console assuming publishing royalties would pay and later on they did. Now, you know, after the bomb of the Zune has run its course and now that Wii U is out Microsoft could be looking at their entertainment division as a potential sale. Why? Because in the past it has been a very risky venture for them and recently profits and revenues of that division have been dropping faster each quarter. Basically I see their sales stagnating until they release another console to drum up more money -- and even then they'll probably take the strategy of letting later publishing sales subsidize the initial unit to compete with Nintendo and Sony.
So, now that their cash cows are looking pretty thin will they be in a position to take another gamble in the console market? Will it be painful like Xbox one or will it be great like Xbox 360? And I'm not in this area of management but I imagine they are looking at their revenues and if committing to the next console is a make or break move for Microsoft as a whole (which would be totally f*cking insane if they are looking that bad) then maybe they'd try to sell it to someone else with huge cash reserves. I don't know why Sony would buy and I don't see B&N having a ton of cash after their brick and mortar stores are a fond pastime.
So, to wrap it up, no this is nothing like Apple selling off the iPad because the iPhone didn't sell as well as they wanted it to. I don't think the iPad ever lost them money and the market still looks good for tablets.
My work here is dung.
uh, wait... http://games.slashdot.org/story/13/01/21/130215/atari-files-for-bankruptcy
if this is supposed to be a new economy, how come they still want my old fashioned money?
Well, as I understand it, the 360 did well in the 'longer haul' of this generation. While the clear winner was the Wii, it has effectively been dead for a couple of years, with the 360 making leads over the PS3 in Europe and I believe, the US?
So... if Microsoft see the 720 as being 'potentially a success' on its own two legs, what would MS do? Given recent history, they'd find a way of jamming Metro into it, somehow. I can see the 720 as being some Windows RT inspired device, aimed at being to your living room what your WP8 is when you're mobile, your Windows Surface device when you're semi-mobile, and your Windows 8 desktop when you're at a desk.
The fact that WP8, Surface and Windows 8 are clearly failing (miserably, in the case of WP8 and Surface) is unlikely to deter MS - Ballmer has been one of the most stubborn CEO's in recent history. His strategy to keep doing the wrong thing, no matter what sales, user feedback, OEM feedback might say is quite remarkable. Zune will succeed! Oh. Well, WP7 will succeed! Oh... er... XNA is doing well in the indie market, let's scrap it! .Net's entrenched in business and enterprise, let's suggest it's second class now! Let's buy Skype and just screw it in to everything we do! Let's do the Surface hardware on our own, our OEM partners will be fully supportive!
I seriously believe a Magic 8 Ball running Microsoft would do a better job, as decisions made entirely by random would have a better chance of sometimes being successful.
If Ballmer continues on this route, either MS will win massively in the long run (by being such an incredible visionary that he blind-sided the entire technology market, and all his ideas thus far have been part of some master plan), or (seemingly more likely) he will run them into the ground, until there's nothing left but a software company looking for a buy out.
And I'm fairly pro-Microsoft. For /., I'd actually be a fan boi.
Personally I love playing FPS games on a console. While I may not be as accurate as on a PC I find it much more relaxing to play.
I've played my share of FPS games on PC's. From Doom, Quake, America's Army and countless others.
It just comes down to personal preference. The only games I have found that really work better on a PC are RTS games. However, after playing C&C on the xbox, once you got the shortcuts memorized it wasn't too bad at all.
"Thanks to the remote control I have the attention span of a gerbil."
We're looking at replacing Office and Notes with Google Apps ... and XP with Linux or Chromebook-style thin clients unless you can come up with a good reason you need a general-purpose PC.
In software development, there are still cases where an essential tool isn't ported to Linux and doesn't work well on Wine.
I can already do all my work in Xubuntu.
I can do almost all my work in Xubuntu 12.04 LTS except for a few things:
Gotchas like these are why a lot of enterprises stay on Windows: it's a known quantity that everything is expected to support.
You can still find page 1 of the article in Google cache. Thanks to ~darkeye, who submitted that.
This is the same author who wrote "Sell Research in Motion. Now." That in April, 2011 as it began its precipitous dive from $53 to $6.50. His views are controversial, but he has a better track record than many official analysts.
Help stamp out iliturcy.