Microsoft's Nadella: We're Not Getting Rid Of Xbox

[Karloff]

Microsoft's Nadella: We're Not Getting Rid Of Xbox

Sometimes in order to find the right experience you just have to make hardware.

It was one of the big questions hanging over the search for the next Microsoft CEO: would the new boss sell off the Xbox division? One contender publicly said he would [http://www.escapistmagazine.com/news/view/129442-Microsoft-CEO-Struggle-Report-Elop-Would-Sell-Xbox], and the others may or may not have been thinking the same thing but were too cautious to say so. Now Satya Nadella's in the hot seat, and his answer to the question is about as clear as you could hope for from a man whose job it may be to say something completely different tomorrow: "I have no intent to do anything different with Xbox than we are doing today."

Interestingly, although Nadella's on record as wanting Microsoft to become a mobile and cloud rather than a devices company, he told the crowd at California's Code Conference that hardware was still important to Microsoft.

Yes, he says, software is definitely the most malleable resource, and will "power all the experiences on all the devices today and tomorrow." You may recall from the GY 2014 Q1 financials [http://www.microsoft.com/investor/EarningsAndFinancials/Earnings/PressReleaseAndWebcast/FY14/Q1/default.aspx] that D&C Licensing made $4.343 billion as opposed to Hardware's $1.485 billion. Clearly software's powering more than just experiences.

But sometimes a company just has to make hardware. "In order to be in the hunt for those experiences, and get it right," says Nadella, "You do need to from time to time build devices, so you don't leave anything to chance."

Earlier this month Bill Gates, Founder and Technology Advisor to the Board, seemed to indicate that he would support Gates pulling Nadella's strings [http://www.eurogamer.net/articles/2014-05-28-microsoft-boss-counters-xbox-spin-off-talk] was a bit too much for investors to bear.

Microsoft was quick to reassure Eurogamer that Gates' statement was intended to support Nadella in whatever strategy he chose, not to indicate a strategy for Nadella to follow. "We remain committed to Xbox and the millions of Xbox fans around the world," said Microsoft's Frank Shaw.

Source: The Verge [http://www.theverge.com/2014/5/27/5756062/microsofts-nadella-xbox-isnt-going-anywhere]


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[Grape_Nuts]

One minor typo in the title there. "Microsofr's" should be "Microsoft's".

 

[Karloff]

One minor typo in the title there. "Microsofr's" should be "Microsoft's".

Damn. Thanks!

 

[Albino Boo]

Well duh, Gates no longer owns most of microsoft. Ballmer does.

Do you think that he will let his already shitty legacy to be snuffed out by someone who might do better? Nope.

Its just Ballmer refusing to face facts. All his ideas are awful. He is still in control, but if shit hits the fan its Nadella that gets blamed.

Err Ballmer only owns 4% of microsoft, he can't dictate any terms.

 

[Albino Boo]

http://techcrunch.com/2014/05/02/steve-ballmer-now-owns-more-microsoft-stock-than-bill-gates/
http://www.bloomberg.com/news/2014-05-02/ballmer-becomes-largest-individual-microsoft-shareholder.html

Ballmer runs the show now as the major shareholder. He is also friends with Nadella. I reported on it, but no one cared for its implications. He is friends with everyone, I dunno how someone can be so likeable people will be willing to lose billions just for his friendship.

He must be banging everyone in the company and doing it well, because no friendship is that strong.

He is the largest individual shareholder but that means that, at 4%, there is no other individual that owns more than him. The other 96% of the company is owned by hedge funds, investment trusts and pension funds. He is not the majority shareholder and anything he says can be ignored. You need 30% before you can even appoint a director.

 

[BrotherRool]

Earlier this month Bill Gates, Founder and Technology Advisor to the Board, seemed to indicate that he would support Nadella if Nadella decided to sell off Xbox. One of the worries, when Nadella ascended to the throne, was whether or not he would be his own man; the thought of Gates pulling Nadella's strings was a bit too much for investors to bear.

Microsoft was quick to reassure Eurogamer that Gates' statement was intended to support Nadella in whatever strategy he chose, not to indicate a strategy for Nadella to follow. "We remain committed to Xbox and the millions of Xbox fans around the world," said Microsoft's Frank Shaw.

This is an example of the power of news spin. In that interview Bill Gates said something along the lines of 'I think there's a lot of reasons to keep Bing and the Xbox and the critics of them don't know the full story', then the interviewer pushed him and said, 'But if Nadella did choose to scrap Bing and the Xbox would support him?' and Gates said something like 'I would support Nadella in whatever he chose to do.'

... a couple of bad headlines later, the world at large is under the impression that Gates was pressuring Nadella to scrap the things.

(This is not about your article of course =D Just pointing out the silly world we all live in)

 

[BloodSquirrel]

I've said it before and I'll say it again: stories about MS selling the Xbox are the "X celebrity is gay!" of tech sites. It's a big, juicy rumor that gets repeated because it's a sensational story, not because it has any merit.

What it ultimately boils down to is that the Xbox business just wouldn't be as valuable to anyone else as it is to MS. It's too integrated into MS's overall tech structure for anyone but MS to run the business as effectively or as efficiently. It's too tied up in MS's overall corporate goals for anyone but MS to get the benefits that MS gets out of it. If the Xbox isn't making enough money to be worth keep for MS, why the hell would anyone else buy it, except at a deep discount?

They've invested billions of dollars into the business. Now they have a choice between throwing those billions of dollars away and sitting back and making a profit off of them. That's not a hard business decision to make.

(On a side note, I'd like to point out how hilarious it is that even after three years of losses Nintendo fans go into hysterics whenever someone points out the Nintendo might need to make some changes, but even after spending the better part of a decade making money people still think it's reasonable that MS would sell off the Xbox division because it lost money in 2004).

 

[vallorn]

One minor typo in the title there. "Microsofr's" should be "Microsoft's".

Damn. Thanks!

I dunno I think I'd rather by an OS from Microsfr. It's just as good! And it has livestreaming from the Aslan cage matches in Narnier built into it!

I don't think they will sell the Xbox at the moment. It's not losing badly enough for them to ditch it without losing face and they would pretty much permanently damage relations with most of the gaming industry which develops for it, Which might push people away from developing games for Windows OSs and into the arms of our lord and savior Gabe Newel.

 

[godofallu]

"I have no intent to do anything different with Xbox than we are doing today."

Anyone else feel that this is the exact worst thing that he could have possibly said? When it comes to Xbox you either have to put in the time and turn things around or give up. You can't just keep churning out a 2/5.

 

[Darkness665]

What I find interesting and somewhat entertaining about the request to dump the Xbox and all of its related cash sinks from MS proper is that MS has committed a lot of expertise in getting additional revenue from that part of the division (entertainment?). They are generating revenue from ads, intrusive, unwanted, miserable ads that are bad enough I turned off my xbox 360 and never activated my last xbox live purchase.

MS is changing its view and desperately trying to change ours as well. Xbone is an entertainment device that also plays games. Wow, I am so excited. However, my opinion and most of us gamers don't matter here. What does is how much ad revenue is MS generating? That information is hidden to a large extent behind the fog of moving xbox financials in with other non-related business functions. While it is commonly thought that xbox/xbone has never actually been profitable overall it is supporting a very significant change at MS. Whether that will pan out will have to wait for future financials. Either way the analyst is only there to get press for his business and making suggestions that make no sense doesn't actually lose him money nor business.

Essentially the entire statement was click bait from an analyst that can make a statement that has no data to back it up. Indeed, MS keeps that information hidden from others although it merely fuels the perception that xbox/xbone is a money loser. As such it gives credence to the click baiter's position. Time alone will tell, not anything else.

 

[Callate]

Ah. So someone in power has come out and said, for the record, that Microsoft is definitely not selling off its XBox division.

...So, even odds, then?