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Microsoft Games Entertainment

Will Microsoft Sell Off Its Entertainment Division? 404

Posted by samzenpus
from the take-it-all dept.
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."
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Will Microsoft Sell Off Its Entertainment Division?

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  • by theRunicBard (2662581) on Monday January 21, 2013 @12:15PM (#42648355)
    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.
  • by alen (225700) on Monday January 21, 2013 @12:16PM (#42648371)

    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 Dunno (Score:5, Insightful)

    by MightyMartian (840721) on Monday January 21, 2013 @12:20PM (#42648429) Journal

    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.

  • by alen (225700) on Monday January 21, 2013 @12:23PM (#42648475)

    a console is $199 to $399 compared to a lot more for a gaming PC

    i used to build PC's for fun and don't want to do it anymore. along with millions of other people who don't care about specs or whatever. you can buy a $199 box with a library of hundreds of games that mostly just work and play on a big TV. the fact that a $1000 PC may have better graphics is a non-issue for most people

  • by faragon (789704) on Monday January 21, 2013 @12:24PM (#42648493) Homepage
    ... 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 [cnet.co.uk]. You'll die, slowly, because of being greedy and short-sighted. In my opinion.
  • Backwards (Score:5, Insightful)

    by MobyDisk (75490) on Monday January 21, 2013 @12:27PM (#42648513) Homepage

    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.

  • by eldavojohn (898314) * <eldavojohnNO@SPAMgmail.com> on Monday January 21, 2013 @12:48PM (#42648745) Journal

    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 [slashdot.org] 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 [microsoft.com]. 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.

  • by Anonymous Coward on Monday January 21, 2013 @12:57PM (#42648873)

    Where are you getting your numbers that the Xbox has lost a lot of money? Xbox has been profitable for years now.

  • by TheNinjaroach (878876) on Monday January 21, 2013 @01:12PM (#42649051)
    $500 gaming rigs do just fine, really. And you can use them for so much more than just games.
  • by lennier (44736) on Monday January 21, 2013 @03:44PM (#42650713) Homepage

    Generally I am repulsed by those repulsed by the profit motive

    And I'm repulsed by those repulsed by those repulsed by the profit motive. It's repulsors all the way down.

    They didn't owe me a job in the first place so if I'm let go, so be it.

    Hear, hear! Good clean social Darwinism. There shouldn't be any kind of "social contract" at all. Our corporations should be sleek, vicious, beautiful monsters, utterly amoral, streamlined of every impulse except a ravening urge to destroy the competition and feast on the juices of sweet, sweet captive markets, the blood and ichor of consumer franchises trickling down their fangs.

    We don't need none of this Commie socialist "empathy" or "compassion" or "rational planning" or "thinking about the issues". That's for sissies.

  • by Safety Cap (253500) on Monday January 21, 2013 @03:46PM (#42650723) Homepage Journal

    who was devolving deeply into socialism toward the end of his life

    Welcome to 2013, Mr. Fossil, where the word "Socialism" doesn't make red-blooded Americans wet their pants the way it did back in the '50s.

    Of course, I'll have to ask you to stop using our Socialist services, including: roads, Fire/Police protection, public parks, water/sewer lines, power grid, internets, national defense, FDA-approved foods/drugs, labor laws, radio/broadcast spectrum, currency and education systems.

    Thank you.

I don't have any use for bodyguards, but I do have a specific use for two highly trained certified public accountants. -- Elvis Presley

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