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Steve Ballmer Replaces Don Mattrick As Xbox One Chief
Edsj writes "While Don Mattrick leaves Microsoft to work at Zynga, Steve Ballmer announces that, from now on, he will be directly in charge of the Xbox One division as quoted: 'Don's directs will report to me and will continue to drive the day-to-day business as a team, particularly focused on shipping Xbox One this holiday.'"
It's hard to imagine Mattrick was a scapegoat given that he implicated himself by defending so rabidly the DRM policies in interviews to the extent of insulting customers. I very much doubt his orders were "Don, go make a dick of yourself in public".
I'm pretty sure he managed that all by himself.
Yes, this feels like a case of emergency damage limitation. After a period in the mid-point of the current console cycle where things seemed to be going their way, Microsoft have had a fairly poor late cycle (unpopular 3rd-gen dashboard, a drought of major exclusives, overtaken by the PS3 in global installed-base stakes). This all culminated in a very difficult lead-up to E3 and an absolute disaster at E3 itself.
The company went in the wrong direction with always-online DRM and, arguably worse, didn't have a convincing story to tell on why it was going that direction in the first place. Admittedly, they probably got dumped on by some of their industry partners. In particular, EA claiming that they never wanted always-online DRM and denying that they had anything to do with its inclusion in the XBone was reminiscent of a small child frantically wiping cake-crumbs off his mouth while emphatically denying that he raided the fridge to steal the cake. But ultimately, whatever pressure there was on MS from publishers to go the always-online route, Sony recognised that it was a better long term strategy to side with the customers instead. MS's about-turn since E3 is welcome, but it hasn't helped the company's reputation.
And reptuation is probably what this is about. Not so much reputation with the general public, but reputation with shareholders. From its early days as a long-shot cash-hungry investment, the Xbox line has become a big part of MS's business. With the Windows side of the business not doing very much and with the company's attempts to get into the phone and tablet market not going very far, annual reports have shown that Xbox and Office are basically the two big growth areas in Microsoft.
On the day of E3 it looked like MS was about to commit suicide in one of those two areas. Shareholders will not have liked that. And while the general gaming public has welcomed MS's u-turn since then, shareholders will have liked it even less. Why? Because it smacks of confusion and a lack of a strategy. If MS had stood firm, then at least shareholders might have clung to the belief that the board knew what it was doing here and would be proved right in the long run. With a u-turn, it seems that the executive team has been making decisions that it doesn't even believe in itself.
So now, Ballmer (who, rather oddly, still enjoys a lot of shareholder confidence) steps in personally to provide reassurance that the company recognises it has a problem and is getting a strategy in place to fix it.
If the games industry in particular (and the tech sector in particular) had smarter and more in-touch shareholders, then a lot of executive teams would be getting very uncomfortable. However, there seems to be little chance of that happening any time soon.