Firm Asks Microsoft to Stop Dragging Xbox Down

Tom Goldman

Crying on the inside.
Aug 17, 2009
14,499
0
0
Firm Asks Microsoft to Stop Dragging Xbox Down



With the Xbox division projected to earn big profits in the near future, investors are recommending it make a clean break from Microsoft.

Microsoft is a giant multinational corporation made up of various divisions that each develop different products in the areas of software and electronics, with the Entertainment and Devices division bringing us merchandise like the Kinect [http://www.amazon.com/Xbox-360-250GB-Console/dp/B003O6JJKY/ref=sr_1_1?ie=UTF8&qid=1286299957&sr=8-1]. Due to the strength of the Xbox console, analysts are actually recommending that the Entertainment and Devices division be separated from the rest of Microsoft so it can reach its full potential.

Whether Kinect will be red ring of death [http://www.escapistmagazine.com/news/view/103571-Kinect-Will-Be-the-Biggest-Platform-Launch-Ever-Says-Microsoft] is largely a thing of the past, there seems to only be room for more profit, especially if Kinect is a success. However, "corporate overhead" is said to "remain the biggest challenge" for the Xbox division.

To remedy this, investment firm Goldman Sachs has recommended that Microsoft "carve off" its Xbox business. A recent Goldman Sachs report reads: "For example, the Xbox products could be an appealing stand-alone entity, given the historical success of the Xbox and the products' brand strength, and the business could show unlocked value with forced cost discipline compared to as a piece of Microsoft." The firm seems to think that a split would help Microsoft tighten its focus.

Despite the impending launch of Kinect in November, for which three million sales are predicted by the holiday season's end (by Microsoft [http://www.escapistmagazine.com/news/view/103519-Microsoft-Predicts-3-Million-Kinect-Sales-Over-the-Holidays]), Goldman has lowered their recommendation in Microsoft stock from "buy" to "neutral" due to threats from products like the iPad and services like cloud computing. As far as I can tell, a separate Xbox business would mostly be an easier way to determine if Microsoft's various new portions were worth investment or not, and wouldn't necessarily affect consumers.

Source: Gamasutra [http://www.gamasutra.com/view/news/30779/Goldman_Sachs_Recommends_Microsoft_Split_Off_Xbox_Business.php]

Permalink
 

Tom Goldman

Crying on the inside.
Aug 17, 2009
14,499
0
0
RROD isn't a thing of the past. They just did a work around for it and even then we haven't had enough field testing to be 100% sure on that. I agree though. They should break away. Maybe then they will have a product i might actually want.
 
Jul 22, 2009
3,596
0
0
Maybe... maybe... Microsoft has it's good and bad points and a split off is a huge thing to do with something like the Xbox and Microsoft.

We shall see.
 

Tom Goldman

Crying on the inside.
Aug 17, 2009
14,499
0
0
No way this would happen, this would just allow goldman more flexability in manipulating stock prices. Goldman sachs is an evil company so I take anything they say as evil advice.
 

Danallighieri

New member
Jun 3, 2010
249
0
0
It'd be a interesting thing to see if it did happen, but I doubt microsoft would ever do something such as that
 

XT inc

New member
Jul 29, 2009
992
0
0
I dunno maybe they should if it would allow the developers to work better I.e valve no getting to release content because microsoft wants to jerk them and consumers around.
 

Tom Goldman

Crying on the inside.
Aug 17, 2009
14,499
0
0
Well this is the silly-est thing I've seen in awhile. While their at it why don't they ask Sony to push the Playstation loose.*Rolls eyes*
 

TsunamiWombat

New member
Sep 6, 2008
5,870
0
0
Hey guys, this part of your company is making a shit ton of money, you should cut them loose so THEY (and we) can make MORE money! It'll make you feel good about yourself!
 

vallorn

Tunnel Open, Communication Open.
Nov 18, 2009
2,307
0
0
Giest4life said:
Yeah, I don't think Goldmansachs shouldn't do the talking......
they have a lot of experience with this stuff.
 

Azhrarn-101

New member
Jul 15, 2008
476
0
0
psrdirector said:
No way this would happen, this would just allow goldman more flexability in manipulating stock prices. Goldman sachs is an evil company so I take anything they say as evil advice.
While you're most likely right, those suits up top tend to trust the demons who work at Goldman, so depending on how greedy the shareholders are, this may well happen. Don't forget that short-term gain is all these people care about, not long term profits.
 

Rathands

New member
Oct 4, 2010
81
0
0
If they break away from Microsoft, can I still justify screaming 'F*** Bill Gates' when the console breaks again?
 

VulakAerr

New member
Mar 31, 2010
512
0
0
"What the fuck?", is all I have to say. Do they not read industry blogs or MS news? It has been stated quite plainly by Microsoft that they view their hardware division highly and want to share tech between Windows and Xbox. Kinect WILL be coming for Windows. I'd LOVE to see it coming for Windows. The potential for Kinect interfaces on the desktop PC or for presentations are mammoth. Separation makes absolutely no sense unless all you care about is stock price. Obviously, they do. Fuck them and their empty soulless ways.

Also, zero points whatsoever for spotting the troll at the top of the thread.
 

Anton P. Nym

New member
Sep 18, 2007
2,611
0
0
Tom Goldman said:
As far as I can tell, a separate Xbox business would mostly be an easier way to determine if Microsoft's various new portions were worth investment or not, and wouldn't necessarily affect consumers.
As far as I can tell, this is the Vampire Squid looking for another place to shove its blood funnel into. I don't see how this actually benefits MSFT at all; they don't need the cash that'd come from a sell-off or spin-off, as they're still sitting on a mountain of cash reserves, but could use the revenues now that Entertainment Division is finally in the black.

I'm not even certain it's in the best interests of the Xbox platform, given its huge start-up debt and sustained operating losses until (finally!) turning profits steadily last year IIRC.

However, if there is a spinoff then Goldman Sachs has another shiny new toy its brokers can hawk to their customers.

(Me, bitter? Nah.)

-- Steve
 

TLatshaw

New member
Aug 30, 2010
123
0
0
It just seems like to much corporate work for too little gain. If people have been tying the Xbox to Microsoft and still riding with them through the RROD era after all this time, I don't think "carving off" would matter much to anyone.
 

Tom Goldman

Crying on the inside.
Aug 17, 2009
14,499
0
0
Anton P. Nym said:
Tom Goldman said:
As far as I can tell, a separate Xbox business would mostly be an easier way to determine if Microsoft's various new portions were worth investment or not, and wouldn't necessarily affect consumers.
As far as I can tell, this is the Vampire Squid looking for another place to shove its blood funnel into.

-- Steve
Well, sure, but I can't exactly say it like that.
 

Tom Goldman

Crying on the inside.
Aug 17, 2009
14,499
0
0
Yeah, trust the people who almost singlehandedly turned the US Economy to shit.
 

AzrealMaximillion

New member
Jan 20, 2010
3,216
0
0
This would never work unless they could pull Microsoft Game Studios could pull away from Microsoft as well, which will never happen as long as MS owns the rights to Halo.
 

Unrulyhandbag

New member
Oct 21, 2009
462
0
0
Azdean Samih said:
Well this is the silly-est thing I've seen in awhile. While their at it why don't they ask Sony to push the Playstation loose.*Rolls eyes*
Sony did that on day one. Sony computer entertainment was formed as a separate entity with autonomy responsible for it's own research, development, product and publishing.

It's the same thing being proposed here as it allows the Playstation to operate without corporate oversight (and allow Sony to wash their hands of the whole project if it went wrong). Of course by now SCE is big and bureaucratic in of itself.
 

GonzoGamer

New member
Apr 9, 2008
7,063
0
0
HG131 said:
Yeah, trust the people who almost singlehandedly turned the US Economy to shit.
Yea. As an investor this is a great idea but as a gamer this is a horrible idea.

The irony is that if Xbox was a separate entity on it's own, the RROD would've bankrupted it. The fact that it was owned by MS is the only reason the 360 didn't go the way of the Dreamcast.... actually the Dreamcast wasn't buried in shame....
Didn't go the way of the Atari.
That was buried in shame, in a secret location in Mexico with the ET game.
 

Firia

New member
Sep 17, 2007
1,945
0
0
Tom Goldman said:
Now that the red ring of death [http://www.escapistmagazine.com/news/view/101469-No-Red-Ring-of-Death-for-the-New-360] is largely a thing of the past, there seems to only be room for more profit,
Wait, whoa what? really? Is that really true? Or are we just hearing about them less because it's expected? What has Microsoft done to prevent RROD's? Thing of the past he says... I want a sited source on that. :)

[edit] oh yeah, a link to news on this. I shall investigate further.
 

samsonguy920

New member
Mar 24, 2009
2,921
0
0
Considering I am not feeling optimistic that Kinect is the Next Big Thing and add that to the fact that the 360 is starting to show its age, I think this would be a wise idea for Microsoft to do. If the 360 doesn't leapfrog up in sales with Kinect, it is only going to go down, and if Microsoft is still attached it will do a lot of damage with loss of sales, investors, and loss of faith in name placement.
If it does, Microsoft can always keep an investment in the spinoff and still win.

But I don't see Microsoft being that smart anymore. That company is stuck in so deep of a rut they can't see Seattle for the dirt.

Addendum: But then there is also the fact that Goldman Sachs itself makes seriously poor choices based on whatever facts they pull out of children stories. Either case it don't matter as MS ain't going to even consider it.
 

Tom Goldman

Crying on the inside.
Aug 17, 2009
14,499
0
0
Tom Goldman said:
Now that the red ring of death [http://www.escapistmagazine.com/news/view/101469-No-Red-Ring-of-Death-for-the-New-360] is largely a thing of the past
Yeah, it's a red dot now. Typical behavior from MS (basically what they've always done, don't fix the problem...just make it report it differently), but as Metacritic reported, quality doesn't necessarily drive sales up (or in this case down). Queue Microsoft's marketing department, and the throng of silly consumers shall follow.
 

smut

New member
Aug 4, 2007
62
0
0
I'm sorry but anyone who takes advice from Goldman-Sachs aka "shitty deal" is asking for trouble.
 

smut

New member
Aug 4, 2007
62
0
0
Mornelithe said:
Tom Goldman said:
Now that the red ring of death [http://www.escapistmagazine.com/news/view/101469-No-Red-Ring-of-Death-for-the-New-360] is largely a thing of the past
Yeah, it's a red dot now. Typical behavior from MS (basically what they've always done, don't fix the problem...just make it report it differently), but as Metacritic reported, quality doesn't necessarily drive sales up (or in this case down). Queue Microsoft's marketing department, and the throng of silly consumers shall follow.
Actually, the design of the new system is much better with less heat now that the CPU and GPU are one die. I work at a game store and we haven't been getting any RRODs lately (except for older units). Obviously this is anecdotal evidence but our other game stores are seeing the same things. RROD has become less and less of a problem after every revision of the console.
 

smut

New member
Aug 4, 2007
62
0
0
Mornelithe said:
smut said:
Mornelithe said:
Tom Goldman said:
Now that the red ring of death [http://www.escapistmagazine.com/news/view/101469-No-Red-Ring-of-Death-for-the-New-360] is largely a thing of the past
Yeah, it's a red dot now. Typical behavior from MS (basically what they've always done, don't fix the problem...just make it report it differently), but as Metacritic reported, quality doesn't necessarily drive sales up (or in this case down). Queue Microsoft's marketing department, and the throng of silly consumers shall follow.
Actually, the design of the new system is much better with less heat now that the CPU and GPU are one die. I work at a game store and we haven't been getting any RRODs lately (except for older units). Obviously this is anecdotal evidence but our other game stores are seeing the same things. RROD has become less and less of a problem after every revision of the console.
There is no red ring on the new consoles, therefore, it's impossible for the newer devices to report the error in that fashion. Doesn't escape the fact that what, 48 million retards out there got suckered in by Microsoft's marketing.
It doesn't matter! A hardware error is a hardware error. And we haven't been seeing any of them from the new slims (or the motherboard revision before that). You claimed MS never fixes anything which is pure unadulterated FUD. Calling 48 million people retards because they bought a console? LOL Did MS piss in your cheerios?

Edit: Isn't the point of marketing to "sucker" in consumers though? But seriously, with any console, it is all about the games, games, games! If there wasn't games that people wanted to play, no amount of marketing could change that. So to act like everyone bought a 360 simply because of marketing is clearly grasping at straws.
 

More Fun To Compute

New member
Nov 18, 2008
4,061
0
0
Windows and enterprise tools have a much higher profit margin than entertainment and devices. The chaos of splitting the companies would present a huge market manipulation opportunity for Goldman Sachs. Sorry, I mean a better free market environment for honest investors who are creating stability in the economy. I bet that XBox would run out of money and fold as soon as they hit a problem, such as Kinect/XBOX 720 failing or Microsoft investors rushing to sell their investments after the split.
 

smut

New member
Aug 4, 2007
62
0
0
More Fun To Compute said:
Windows and enterprise tools have a much higher profit margin than entertainment and devices. The chaos of splitting the companies would present a huge market manipulation opportunity for Goldman Sachs. Sorry, I mean a better free market environment for honest investors who are creating stability in the economy. I bet that XBox would run out of money and fold as soon as they hit a problem, such as Kinect/XBOX 720 failing or Microsoft investors rushing to sell their investments after the split.
Don't ya know man, it is all about the invisible magic hand of the free market! The invisible hand knows all and what the invisible hand wants, the hand gets! Our job is to obey the hand!
 

More Fun To Compute

New member
Nov 18, 2008
4,061
0
0
smut said:
Don't ya know man, it is all about the invisible magic hand of the free market! The invisible hand knows all and what the invisible hand wants, the hand gets! Our job is to obey the hand!
And if the invisible hand says that most of the money must go to Goldman then that just means that they are the invisible hand's infallible representatives on Earth.
 

Tom Goldman

Crying on the inside.
Aug 17, 2009
14,499
0
0
smut said:
It doesn't matter! A hardware error is a hardware error. And we haven't been seeing any of them from the new slims (or the motherboard revision before that).
Fair enough, at least you know, before they hit the 50 million mark, they managed to fix a critical design flaw. How nice of them lol.

You claimed MS never fixes anything which is pure unadulterated FUD. Calling 48 million people retards because they bought a console?
Actually, the company has a pretty long history of saying they've fixed 'something' but simply making the issue report in a different fashion, this goes all the way back to Windows 3.11. Do I think 48 million people are idiots for buying a defective machine, that was knowingly defective by both the parent company (prior to launch) and less than a month after launch for the public? Of course I do. People used to demand quality at the time of purchase, but as I stated previously, Microsoft used marketing dollars to make up for it (Because people are too complacent in their ignorance to actually research their purchases anymore). And the end result? Masses of people going through multiple devices time and time again. What's insanely funny is my roommates original Xbox still works, and yet his 360's dead. I find that most hilarious.

LOL Did MS piss in your cheerios?
No, Microsoft does as they normally do. People however, seem to be much less interested in forcing companies to remain honest. My only real concern, is that Microsoft will continue business as usual, while people continue to be idiots.
 
Jul 22, 2009
3,596
0
0
Mornelithe said:
Why is it every time I see you in a thread about Microsoft you're insulting a remarkably high number of people...

First you insult poor people for being 'lazy', now you insult customers for being stupid...

You realise that Microsoft handled the hardware failure incredibly well.
3 year warranty on all new consoles, most consoles kicked it in that time, they were then replaced by the newer models which have a much much lower hardware failure rate.

And most people buy a console for the exclusives now. So you called 48 million people retards for having an opinion...
 

Dragunai

New member
Feb 5, 2007
534
0
0
GamesB2 said:
Mornelithe said:
Why is it every time I see you in a thread about Microsoft you're insulting a remarkably high number of people...

First you insult poor people for being 'lazy', now you insult customers for being stupid...

You realise that Microsoft handled the hardware failure incredibly well.
3 year warranty on all new consoles, most consoles kicked it in that time, they were then replaced by the newer models which have a much much lower hardware failure rate.

And most people buy a console for the exclusives now. So you called 48 million people retards for having an opinion...
wanna add to this that my Xbox was bought in the 1st month of release and It only RROD about 6 -8 months after the warranty expired. I checked the Microsoft homesite and they said that any console that suffered its 1st RROD after the warranty would still be eligible for a free repair.

So Despite my console running perfectly until the 4th year or whatever they still fixed it with no hassel, no "but this but that" and it was taken, repaired and back on my TV letting me chainsaw locusts within 4 days of it breaking.

As a man who once hated Microsoft for the allegedly built in bugs of its OS's I do actually respect their Xbox divisions for how much they care about their customers.

So no 48 million people weren't retarded, it was a calcualted risk.

Buy console, if it breaks Microsoft will fix it for free and this was when the 1st era of 360s was just out. Retarded is paying £400 for a glorified blu ray player then sitting telling Xbox 360 owners from your ivory tower than a marginally better graphics quality justied the extra £150 - £200 sales sticker.
 

Redlin5_v1legacy

Better Red than Dead
Aug 5, 2009
48,837
0
0
As much as I like Microsoft[footnote]/sarcasm[/footnote] I don't want to see this split. More money for Microsoft, more money they could be, in theory, spending to make Windows 8 amazing.

Also Goldman Sachs is run by the devil very, very questionable individuals so I can't in clear conscious approve their advice.
 

Grey_Focks

New member
Jan 12, 2010
1,969
0
0
hehe, financial advice from Goldman Sachs, how droll.

Also good to see this thread didn't make it past the first page before some foolish troll came in and called everyone who bought a 360 a retard. Nice to know we Escapists are truly a mature group.
 

Albino Boo

New member
Jun 14, 2010
4,667
0
0
If xbox was hived off it would get bought by somebody, perhaps EA/Actvision but more likely an Indian or Chinese company on a shopping trip.
 

mjc0961

YOU'RE a pie chart.
Nov 30, 2009
3,847
0
0
Tankichi said:
RROD isn't a thing of the past. They just did a work around for it and even then we haven't had enough field testing to be 100% sure on that. I agree though. They should break away. Maybe then they will have a product i might actually want.
No they didn't. RROD was a think of the past before the 360 S model came out (which by work around I assume you're talking about how the new models don't have red LEDs for the ring of light). It was a thing of the past sometime after the Jasper chipset was released and RROD didn't happen at a huge rate anymore.

Rathands said:
If they break away from Microsoft, can I still justify screaming 'F*** Bill Gates' when the console breaks again?
You can't justify it now. I mean, damn, are people going to still be cursing Bill Gates for stuff Microsoft did after he's dead? "Damn you Bill Gates, the Xbox 15 is a piece of shit! Why didn't you make this thing better? ANSWER ME YOU CORPSE!"
 

Dogstile

New member
Jan 17, 2009
5,093
0
0
Mornelithe said:
Yeah, because Microsoft totally didn't give everyone a 3 year warranty on the 360 for /free/ and a month free xbox live if it broke, despite it only taking a week to get me a new one. That's right, a new console that was actually an updated version.

But of course, no, forget that. Forget that the red ring hasn't been talked about lately because the consoles haven't been bricking so much. Microsoft doesn't fix problems. No siree.

Let me guess, apple or linux fanboy?
 

RUINER ACTUAL

New member
Oct 29, 2009
1,835
0
0
toastmaster2k8 said:
Imagine if Valve could be able to bring its magic to the Xbox 360.
Imagine if Valve made a console...Imagine...

Goldman Sachs doing something that doesn't involve stealing money? And it's a good idea? Whaaaa? Is it backwards day on Planet Glorbna?

OT: I could go for this. Plus with Xbox not being associated with Microsoft, more people could be brought into it because a lot of gamers don't like Xbox because they are with Microsoft. My firend is one of them. He hates anything dealing with MS.
 

BloodSquirrel

New member
Jun 23, 2008
1,263
0
0
Somebody clearly isn't familiar with Microsoft's long-term plans. The Xbox isn't just a gaming device to them. It's part of their long-term vision for some kind of integrated entertainment and computing hub. Meanwhile, the Xbox benefits a lot from Microsoft's vast technical infrastructure.
 

Tom Goldman

Crying on the inside.
Aug 17, 2009
14,499
0
0
Hm. Let's see.. Goldman Sachs downgrades MS.
Then, MSFT rising nearly 2% the day after their downgrade they announce that shareholders would benefit if MS underwent a massive internal rigamarole to try to divide out it's Xbox hardware division from all of it's other hardware, not to mention the various engineers and, more importantly, upper level management people -- while in the process implying to the shareholders that not doing this is causing them to lose returns.

Gee.. wonder who's invested in puts lately?
 

Tom Goldman

Crying on the inside.
Aug 17, 2009
14,499
0
0
mjc0961 said:
Tankichi said:
RROD isn't a thing of the past. They just did a work around for it and even then we haven't had enough field testing to be 100% sure on that. I agree though. They should break away. Maybe then they will have a product i might actually want.
No they didn't. RROD was a think of the past before the 360 S model came out (which by work around I assume you're talking about how the new models don't have red LEDs for the ring of light). It was a thing of the past sometime after the Jasper chipset was released and RROD didn't happen at a huge rate anymore.
Even with the newer chip sets it happens. The Big Contributor to the RRoD is the Heat syncs. The workaround i speak of is when your console starts getting to hot it starts flashing with the RRoD then says your system is beginning to overheat then turns off for safety.
 

RatRace123

Elite Member
Dec 1, 2009
6,651
0
41
Eh, I may agree with this, but mainly because of Kinect.
It may not seem like it, but it's a huge gamble, if it fails it could be devastating, and given its launch library, it'll most likely fail among the Xbox's current "hardcore" audiences, if the devs can't pull up sone decent games for the damn thing, and if it fails to grab a portion of the Wii's audience, it'll just plain fail.

I haven't seen the general impression for Sony's Move, but I'm assuming the same rules apply.
 

N7 Ruiz

New member
Nov 23, 2009
38
0
0
I dont trust goldman I had to help these morons with there dumb ideas I trust Mircosoft
 

Anton P. Nym

New member
Sep 18, 2007
2,611
0
0
RatRace123 said:
Eh, I may agree with this, but mainly because of Kinect.
It may not seem like it, but it's a huge gamble, if it fails it could be devastating, and given its launch library, it'll most likely fail among the Xbox's current "hardcore" audiences, if the devs can't pull up sone decent games for the damn thing, and if it fails to grab a portion of the Wii's audience, it'll just plain fail.
Panzer Dragoon, Steel Battalion, and a Rez sequel are all coming to Kinect. I hope that there are more such in the pipe (an RTS would be interesting) but that's a promising start.

-- Steve
 

Ghengis John

New member
Dec 16, 2007
2,209
0
0
They probably just want to snap the Xbox brand up and Microsoft is too much for them to take along with it and still maintain their cushy bailout bonuses. I'm certain they have an ulterior motive. At any rate, seeing as they engineered our current economic crisis (it seems intentionally from their internal documents) I'm not sure they're the most scrupulous individuals to be taking advice from. For that matter, MS has spent a lot of resources on development and advertising. Why in the world would they cut the brand off when it's turning a profit?
 

RvLeshrac

This is a Forum Title.
Oct 2, 2008
662
0
0
RUINER ACTUAL said:
toastmaster2k8 said:
Imagine if Valve could be able to bring its magic to the Xbox 360.
Imagine if Valve made a console...Imagine...

Goldman Sachs doing something that doesn't involve stealing money? And it's a good idea? Whaaaa? Is it backwards day on Planet Glorbna?

OT: I could go for this. Plus with Xbox not being associated with Microsoft, more people could be brought into it because a lot of gamers don't like Xbox because they are with Microsoft. My firend is one of them. He hates anything dealing with MS.
This isn't a good idea, this is a terrible idea. The XBox is only a successful brand because Microsoft is behind it and shares technology between the XBox and Windows platforms. The 360 is incredibly easy to develop for, and Windows development from existing XBox code (or vice-versa) is easy.

That technology sharing is free now, but I guarantee it would cost substantially more than half-million dollars a year if these were two separate entities.

This is the same short-sighted nonsense that Goldman was spouting when they grabbed our ankles and pulled us into the gaping maw of economic hell.

--

I would like for people who "hate anything dealing with MS" to stay the hell away from my tech. That line of thinking shows an incredible lack of intelligent thought.