Forbes Analyst Calls Game Over For Microsoft

[GonzoGamer]

What I'm left wondering is who would be a good corp to buy the Xbox brand? B&N could have something to add with a retail showing that's still surprisingly strong and have shown adaptability to the market. Disney would probably love to sink their teeth into something like that but they would likely bland it up and add even more advertising.
What about one of the big publishers like EA or Activision? Do either of them have a "war chest" for something like that.

All I know is Nintendo would re-buy Rareware. I don't know why anyone would want to continue the Xbox brand if Microsoft dropped out of consoles. Did anyone pick up Sega's Dreamcast? No. I don't think it would make sense for someone to keep making Xbox's if it's not Microsoft.

OT: Gosh, I thought Sony was the only one in major trouble (With Nintendo in a little bit of trouble and Microsoft impervious from it). Guess they're in a little trouble that could verge onto major trouble in the near future...

Also, my laptop uses Windows 7 while my family's desktop uses Vista, so maybe Microsoft should slow down on Operating system development?

At that point the Dreamcast didn't have tons of subscribers paying a monthly fee; there were only a few individual games that charged for online and they didn't have nearly as many Gold members as XBL.
I can see some company saying "here's a bunch of people who pay a monthly fee to have advertisements spit at them; I think we can work with that."

 

[Mr.Mattress]

At that point the Dreamcast didn't have tons of subscribers paying a monthly fee; there were only a few individual games that charged for online and they didn't have nearly as many Gold members as XBL.
I can see some company saying "here's a bunch of people who pay a monthly fee to have advertisements spit at them; I think we can work with that."

While that is true, I think either Microsoft would simply continue making money off of those Gold accounts while quietly discontinuing the Xbox, or another company would simply try to replicate XBL with their own system. I don't see Microsoft selling the Xbox brand to another company, and I don't see any company buying the Xbox Brand.

 

[BreakfastMan]

BWAHAHAHAHAHAHAHahahahaha... No. Just no. Microsoft does make more than just Windows and Xbox. Surprising, I know, but they do. And in those areas, they have a significant market share. They might jettison the Xbox division (doubtful, but it could happen), but they are sure as hell not going under any time soon.

 

[Zeckt]

Honestly ever since they started ignoring pc gaming by transitioning windows into an apple like market that they will have complete dominion over and STILL charging for live holding multi player hostage I could care less about whatever happens to the company.

All I can say is good riddance I guess? But they are not going away anytime soon, which is unfortunate. Why be loyal to a company that screws you?

 

[EHKOS]

40% of Microsoft users still use XP? Does that exclude businesses or something?

No, I usually peer over the counter of stores whenever I can, and I almost always see the XP screensaver. It makes sense, why upgrade your floor equipment when it's not necessary.

OT: I'm pretty sure this isn't, and won't be, true. And while I hate the 360, I would certainly hope Windows doesn't go down the drain.

 

[Entitled]

The real question is, what will happen once one of the consoles actually fail?

In the past few years, we have gotten too used to the idea of three companies equally dividing the parket among themselves, but this was a rather unique situation, there was almost always either a single dominant system, and/or a clusterfuck of tiny attempts from minor corporations.

Sony and Microsoft are both struggling in their non-gaming divisions, while sinking billions of dollars into early-generation gaming, to be bought back by late-generation dominance.

But what would happen if one of them would end up with an unsellable next-gen system? Would they stil continue risking to sink billions into it, in the current market, when they would know that there is little hope of ever reaching even 20% market share?

 

[joshthor]

it appears the article was pulled. the link doesnt work

 

[medv4380]

I'm calling bullshit man person. The words spewing out of your mouth are INSANE!

People have been calling the death of Microsoft for years now. But, with their huge market share in the computer market, combined with the sales they've gotten on a console that's been going strong for 7 years now, I think it's safe to say they're fine for now.

Why do MS fanboys always choose to ignore the market analysis. Business analysts have not been calling the death of MS for years. Any analyst would have told you 10 years ago that MS could afford to make huge mistakes and still come out on top because Office and Windows can subsidize any mistake they make.

Lets go over a few facts.

"Market Share" in the case of Windows is meaningless. In gaming Market Share has meaning because each system is sold at a loss to establish the market share, and each game sold at a profit (if you're smart). The same holds for Apple because the Market Share they have establishes a revenue stream to sell more product through their App Store. For Windows Market Share establishes a revenue stream of its own and an avenue to sell more MS Office. That accounts for 75% of their Profit. Market Share isn't establishing a way to get additional revenue beyond those two products.

It also means that they are a very diverse company. When too much is tied up into only 2 product investors start circling like vultures when any hit of weakness is seen anticipating a disaster that they can make money off of shorting the stock.

The Windows and Office Revenue stream is now tightening up. Here is how it breaks down. Windows XP currently represents 39% of the market. What that should have meant is that when it came time to upgrade to Windows Vista people should have switched. Instead people hated Vista and it only has 5% of the Market. People waited and those who were forced to upgrade went for Win7 and that represents 45% of the market. However, the 39% of users still sitting on XP are refusing to upgrade to 7. This is a loss of revenue for MS, and a big one. Win 8 only represents 2% of the market and is looking like it will be another Vista. MS cant afford this. They've been taking Huge losses on XBox and other things for YEARS, and don't know how to function without Windows and Office Revenue.

They have a console that's been nothing but 7 strait years of LOSSES.

Basically, their subsidizing of losing positions like XBox, among others, has created a tightening noose. If they don't start trimming some of the fat and making a profit off of the XBox then they will die.

----
EDIT
For those can't find the article on Forbes anymore here is the writers site [http://www.thephoenixprinciple.com/blog/2013/01/sell-microsoft-now-game-over-ballmer-loses.html]

 

[Adam Jensen_v1legacy]

And the PC Gaming Master Race shall laugh incessantly as they watch Microsoft pay the price for alienating them.

This, in a way.

If Microsoft had any clue, they would focus on making PC better. They need to market the shit out of PC instead of trying to come up with their own version of iPad. People are sheep and they are for some reason loyal to Apple. They need to switch that loyalty around and remind people why Microsoft is awesome and why they should choose MS instead of Apple. Yet it seems Microsoft is doing the exact opposite. They are not marketing the PC. Instead they created an OS that makes people ask themselves "why don't I just gen an iPad". They need to stick to their guns and innovate on what they already have.

Also, PC won't die if Microsoft falls. It will just make room for Linux.

 

[RicoADF]

Yikes. If microsoft were to go under, that'd be the end of PC Gaming... and the PC altogether.

Hey Microsoft... don't die. Please?

Your joking right.......?
Linux would take over, heck its already making headways thanks to Win8

 

[Strazdas]

40% of Microsoft users still use XP? Does that exclude businesses or something?

well, actually, i am writting this from XP, at work. At home i would love to use XP, but am forced to use Win7, because they dont make drivers for XP anymore.

The only way this is right in my opinion is due to win 8 flop. Then again mircorsoft was loosing share to apple lately by a big margin. and i woudl rather have microsoft than apple. but i guess with things liek steam and google working on making their own OS (based on linux) microsoft is really in danger if it tries to push win 8 like it did with Vista.

You know, this guy may not be in the wrong. and whiel microsoft may not implode, the "Sell shares now" is right as the price will fall down.

Explain to me how Linux has made any advantage over Windows, aside from the biggest whiner in the industry deciding to run to it the moment he was faced with actual competition?

Actually don't explain it to me. I don't really care.

too bad, youll get a PM anyway.
Formula1 Use Linux. They used to use Microsoft servers, and thier analysis took weeks. They tried linux servers and turns out it was shortened to days. So they stuck with it and now all teams pretty much use Linux, because they find it far superior. And thats an AAA class sports out there, pretty much top of the racing. Linux may not be good for the casual gamer that wants to just plug and play. i personally hate linux. but for corporate work and technical side linux is superior.

The real question is, what will happen once one of the consoles actually fail?

What should have happened 10+ years ago. PC gaming would flourish, single playform makes it much cheaper and easier to develop games to due to no need of porting. Due to diverse nature of PC and ability to connect pretty much any device to it gaming would be able to easily experiment. DUe to concurency of preroducts people would be forced to inovate and create good products instead of shelving same thing out every year simply because there is no real competitor.
progress would happen. the same progress that stopped years ago.

 

[Treblaine]

Sorry, but who is trading in their Mass Effect and Call of Duty for Angry-Birds?

Yes, console sales are shrinking, and tablet/phone market is growing, but it's NOT because people are leaving consoles for Tablets, that's just a silly assumption.

Console gamers are still playing games, they just aren't buying them. There is such a huge used market, they are endlessly cycling through that and the market is saturated, it's reaching a point where everyone who wants an xbox has probably got one by now.

The people buying tablets are people like my mum, and older art-student sister, who never considered playing any kind of "core" video game.

And how do you measure growth in the PC market? How can you tell the difference between a PC bought for general browsing + word processing and one for gaming? Even gaming capable ones often don't have any games installed on them!

 

[Treblaine]

Explain to me how Linux has made any advantage over Windows, aside from the biggest whiner in the industry deciding to run to it the moment he was faced with actual competition?

Actually don't explain it to me. I don't really care.

Ask Valve.

They developed Left 4 Dead for windows machines and years of tweaking to get the performance it has.

Porting it to linux and with only a few weeks of tweaking, they got it to outperform the game running on the same hardware using windows.

http://www.joystiq.com/2012/08/04/linux-left-4-dead-2-outperforms-direct-x-windows-version/

Linux is simply better. Fundamentally.

The only advantage Windows has is that it's established and widely supported in terms of drives and game releases. But WINE is changing that, which "spoofs" the Windows environment yet leaves the handling down to the Linux OS, works damn well.

In a perfect work, every PC would run Linux... but, it's everyone making that leap together. There are enough XKCD jokes about Linux users who jumped before everyone else.

 

[mysecondlife]

it appears the article was pulled. the link doesnt work

http://webcache.googleusercontent.com/search?q=cache:Z07qoZSJTV8J:www.forbes.com/sites/adamhartung/2013/01/20/sell-microsoft-now-game-over-ballmer-loses/

Here you go. When I first checked it, it got a lot of negative reactions. I'm guessing that's why forbes pulled it.

 

[VoidWanderer]

So Forbes is the 'Fox News' of the financial world?

 

[MeChaNiZ3D]

I doubt Microsoft will fall so easily, but I'm not an analyst, so I'll see. Consoles have been a heavy undertaking by all parties except maybe Nintendo - some of the time.

 

[loc978]

I sincerely hope it's true this time, a smaller microsoft could finally make competition in the PC market healthy again. It's been easily half of my life since that happened.
(says the guy typing on a 4 year old laptop running ubuntu)

 

[RicoADF]

Yikes. If microsoft were to go under, that'd be the end of PC Gaming... and the PC altogether.

Hey Microsoft... don't die. Please?

Your joking right.......?
Linux would take over, heck its already making headways thanks to Win8

Yeah sure. The one operating system without anything in the territory of tech support in case it breaks. Linux. The operating system described as "Don't uninstall the OS your computer came with, just in case."

Explain to me how Linux has made any advantage over Windows, aside from the biggest whiner in the industry deciding to run to it the moment he was faced with actual competition?

Actually don't explain it to me. I don't really care.

First off, Linux has already started to take off on phones and tablets, it's called Android. Also the PS3 runs on Linux.

So right off the bat we have 2 linux versions with full support and run with no need for windows. As for desktop, there are Linux versions that come with support like Windows, arguably better support, for a price (not all Linux distributions are free, and of those that are many offer support for a fee). However even if someone wants to go the free route without paying for the support, theres also the linux community. You ask it and they will answer it on the community forums, not to mention IRC chat's. Microsoft doesn't offer live chat support for free however the IRC chat's are exactly that.

The only reason people say "Don't uninstall the OS your computer came with, just in case" is as a backup for those first going into the linux scene. It's basically incase theres a program you must use that hasn't got an alternative (usually gaming) or you computer has a very obscure peice of hardware that linux doesn't support, however that's becoming very rare now. The other reason is because people like what's familiar, and by keeping Windows on the system if the person doesn't like Linux they can switch back easily (or want to ease themselves in and don't want to jump fully in at once).

For the most part it's literally gaming that's holding Linux back, if AAA games supported linux (and considering as already mentioned the PS3 is Linux and thus a desktop linux version wouldn't be that hard) then myself and many other's would drop Windows in a second. Linux is faster, more secure and far less headachs. Most importantly Linux is made to work how YOU want it, not how some egg head in Microsoft HQ tells you to have it (See Windows 8 and Metro/Modern UI).

 

[Kuredan]

steve ballmer is the key to this.

2. the xbox (hardware) project has been making losses from launch. Microsoft has tried to hide the losses on the companys balance sheet by doing things like altering the company accounting structure and placing the division under Offices and the like and has been royally pissing off its major corporate investors in the process because major corporate investors know how to read fucking accounts.

While I may agree that the core of Microsoft has been its software, I disagree with your statement. I was a shareholder of Microsoft when the first XBOX came out and when I looked at the shareholders report every year, I didn't see a giant gaping money hole for the XBOX. It's true that the console didn't turn a profit until the very last parts of its release cycle; that was explained in the reports. It also showed that this money was recouped using licensing deals for its games and the profits from games developed in house.

While that may not be the best model for profit, I can't really see how offering a high end electronic device at consumer prices can be sold at anything but a loss. Amazon does the same thing. They often sell hardware at a loss and make it up with volume in other sales generated by the hardware. It makes no logical sense, but if I had invested in them back when they first started out and I had yet to understand their business model, I'd have a lot more return on my investment now. It defies conventional revenue models but it works.

The XBOX 360 is an even better example. Microsoft minimized the loss per unit and had a much larger target set for licensing as developers actually wanted to make games for the next console. The hardware actually starting turn a profit in 2008. The Playstation 3 didn't turn a profit until mid 2010. This doesn't mean that the consoles are unprofitable or that they are a hole for the company. It's considered an acceptable risk to make a loss on the hardware end if that loss is ameliorated by subsequent revenue created as a result of purchasing the hardware (eg. games.)

Now if you want to talk about Microsoft pitfalls, it's ironically in the software department I think you'll find the worst flaws. Windows 8 hasn't grabbed the attention of most users, and for good reason. I have used it since the pre-release and we still are not friends. They seriously kneecapped my productivity with the UI and it's about intuitive as a treatise on Warp drive configurations in the original Klingon. It's a terrible operating system for a desktop, it's the childproof scissors of OSes. It would probably work fine on a tablet, but the offerings for a Win 8 tablet are slim and unappealing. They had a great idea for the keyboard on the Surface though. Touchscreens are serious hampers for productivity so its nice to see the Surface at least get one thing right. All in all, Windows 7 was in the right direction. Windows 8 was in a direction but I'm not quite sure which one. It's sure not the way I'm going, though.

As for 40% of users still having XP, it's no real surprise. This is the same reason so many people still use Internet Explorer and probably IE6 or 7; it's what came on their computer and they see no need to get a new computer or change anything. Also most government/ business contracts still have a lot of XP licenses still left so they will stay in XP for monetary reasons and what's more XP has a lot more stability and security options.

 

[Ken Sapp]

Yikes. If microsoft were to go under, that'd be the end of PC Gaming... and the PC altogether.

Hey Microsoft... don't die. Please?

Your joking right.......?
Linux would take over, heck its already making headways thanks to Win8

Yeah sure. The one operating system without anything in the territory of tech support in case it breaks. Linux. The operating system described as "Don't uninstall the OS your computer came with, just in case."

Explain to me how Linux has made any advantage over Windows, aside from the biggest whiner in the industry deciding to run to it the moment he was faced with actual competition?

Actually don't explain it to me. I don't really care.

First off, Linux has already started to take off on phones and tablets, it's called Android. Also the PS3 runs on Linux.

So right off the bat we have 2 linux versions with full support and run with no need for windows. As for desktop, there are Linux versions that come with support like Windows, arguably better support, for a price (not all Linux distributions are free, and of those that are many offer support for a fee). However even if someone wants to go the free route without paying for the support, theres also the linux community. You ask it and they will answer it on the community forums, not to mention IRC chat's. Microsoft doesn't offer live chat support for free however the IRC chat's are exactly that.

The only reason people say "Don't uninstall the OS your computer came with, just in case" is as a backup for those first going into the linux scene. It's basically incase theres a program you must use that hasn't got an alternative (usually gaming) or you computer has a very obscure peice of hardware that linux doesn't support, however that's becoming very rare now. The other reason is because people like what's familiar, and by keeping Windows on the system if the person doesn't like Linux they can switch back easily (or want to ease themselves in and don't want to jump fully in at once).

For the most part it's literally gaming that's holding Linux back, if AAA games supported linux (and considering as already mentioned the PS3 is Linux and thus a desktop linux version wouldn't be that hard) then myself and many other's would drop Windows in a second. Linux is faster, more secure and far less headachs. Most importantly Linux is made to work how YOU want it, not how some egg head in Microsoft HQ tells you to have it (See Windows 8 and Metro/Modern UI).

Here's an interesting question for you:

What if I like how the egghead at Microsoft HQ designed my OS (I obviously do, otherwise I wouldn't have bought it)? Maybe I don't want to spend hours configuring a linux system only to have it die on me anyway. There's some things I don't WANT to put together myself. Why? Because I'm not an expert on how computer software runs. That's kinda the whole reason Microsoft exists in the first place.

My problem with Linux is that it doesn't actually DO anything. I've actually tried linux before. It's worthless. None of my software works with it, it's a ***** to get it to recognize all my internal hardware (like my wireless card) and when it does crap out I have to deal with some douchebags on a forum with a massive superiority complex.

Not to mention I had to contact Microsoft Support to help install Windows 8, and they were a massive help.

Personally I can say that I will never move to Linux. Mostly because I really don't like it, and also because my job involves the use of the Adobe library and Sony Vegas. And guess what they don't run on?

You started my point before I had a chance to.

I do have to slightly disagree with you while greatly disagreeing with RicoADF. I think Windows 8 is a dog. I tested each release, including the final production release, and found the Metro interface to be nothing but a hindrance. The rest of the OS, once you get past Metro, is fine though. It runs my apps just as well as Windows XP, Vista, and 7 ran them.

On the subject of Linux, I have used Linux off and on for several years and am typing this on a Linux box. For average use it is perfectly serviceable, with occasional hiccups like unsupported wireless cards. However, lack of AAA gaming is not what is holding it back from popular use. Snooty holier-than-thou geeks, lack of industry standard productivity software such as Adobe products, AutoCAD, professional multimedia software, and limited or non-existent preinstalled Linux computers are what is holding it back. AAA gaming plays only a small role in Linux's continuing small role in desktop computing. If there were a large enough install-base of Linux computers AAA game companies would be all over them, but you can't expect a gaming company to sink millions of dollars into development for a platform that has seen only mild growth over the past decade.