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XBox (Games) Businesses

360 Bundles Lead To Best Buy Housecleaning 115

Posted by Zonk from the making-money-like-jerks dept.
Groo Wanderer writes "At the launch of the XBox 360, there were reports of forced and unwanted bundling by several companies, most notably Best Buy. There were things said back and forth, and the usual corporate banter. They have followed through, this time, and a good number of people lost their jobs." From the article: "We are told a manager that started the procedure is no longer employed at Best Buy. At least one senior district manager is no longer employed, and some of the nailings are rumored to have gone even higher. The big yellow inquisition did not stop there, and several other managers and assorted white collar workers were given an escorted walk to the parking lot."
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360 Bundles Lead To Best Buy Housecleaning More

360 Bundles Lead To Best Buy Housecleaning

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  • Why is bundling wrong? (Score:4, Insightful)

    by Fatchap ( 752787 ) on Monday February 13, 2006 @01:47PM (#14708986)
    I don't get it, what is wrong with a store saying "Sure I will sell you this thing you really want, but at the price I want to charge. I will even include some crap you don't really want, but you still have to pay the price I want to charge"

    Seems that if you don't want to pay the price you go elsewhere or you don't buy the product.

    • Re:Why is bundling wrong? (Score:5, Funny)

      by voice_of_all_reason ( 926702 ) on Monday February 13, 2006 @01:51PM (#14709039)
      Because Best Buy is a chain. Each store has its own boss, but they still have to answer to the Big Boss. In other words, they were already bound by a previous deal

      Best Buy's don paid for all the Xboxes, which he then sold to his capos. One of the terms of this sale was that "youse hafta agrees wit company polisees, capiche?"

    • Re:Why is bundling wrong? B &W (Score:1, Insightful)

      by Anonymous Coward
      It was a case of Bait and Switch. Where corporate placed certain ads and press releases, along with various guidelines how to handle matters, while people below were doing something different.
    • From a consumer perspective, the store is misusing its position (being one of the few stores with a limited stock of the product) to force you to pay higher costs that you don't want to pay to get extra products you don't want just so you can have the core product that you DID want. This is different than just charging a higher price due to limited availability.

      From the store's perspective, this is bad because it probably drove a lot of customers into the arms of competitors. Which means that customers they might have counted on to come back to purchase games and accessories will now turn to online stores or other retailers for their needs.

      THAT is what's so wrong.

      Oh, and it can attract the attention of the Federal Trade Commission for anti-consumer practices.
      • From a consumer perspective, the store is misusing its position (being one of the few stores with a limited stock of the product) to force you to pay higher costs that you don't want to pay to get extra products you don't want just so you can have the core product that you DID want.

        That's par for the course in every other market.

        Ever looked into buying a new car that is particularly popular? They never have one for the MSRP. Convieniently the only ones they have in stock have options you didn't need, and co

    • Re:Why is bundling wrong? (Score:5, Insightful)

      by bVork ( 772426 ) <<moc.liamg> <ta> <todhsals+alletnapr>> on Monday February 13, 2006 @01:55PM (#14709099)
      The problem is that they advertised the real $399 price and didn't honour it. This is a classic bait-and-switch.

      There were also rumours that some EBs and GameStops were fiddling with the pre-order wait list based on how many games and peripherals were also pre-ordered. Does anyone have more information on that?

      • Re:Why is bundling wrong? (Score:5, Informative)

        by Anonymous Coward on Monday February 13, 2006 @02:04PM (#14709209)
        I'm hiding as a coward for this one. I'm an ex-EB employee and still know a lot of the managers around my area personally. And yes, they do have a tendency to play with presell lists and call people who ordered more first instead of who ordered first. They also forced bundles on the customers. They do it because of pressure from the GM to meet the add-on numbers set for each store (which is pretty much impossible without breaking the rules.)

        This is also how the featured game of the month works, also. No matter how bad it is, each store has to sell a certain amount, and people do get fired when they're not met (even when the game was Turok and the number worked out to 20 in an hour every hour, even though the store was lucky to get 20 people in some days.)

        Managers that have stores that don't meet the numbers are first sent off to work in the crappiest stores, sometimes forced to demote themselves (with a threat of just being fired otherwise) and then promptly let go within a few months.

        EB Games has to be one of the worst companies I've ever worked for. I'm glad it was just a job I had while looking for real work instead of a career like it is for some of the managers.
        • This is why I could never work as a salesperson. My view is that if somebody doesn't want to buy something, then that's the end of the story, and salespeople should shut the hell up and accept that no means no. As soon as any salesperson starts trying to foist extra stuff on me, that's generally when I head for the door. You can't *force* people to buy something they don't want.

          If for some weird reason I decided I had to buy an Xbox 360 tomorrow (like I could - every game shop in town still has 'out of st

          • if the sales being conducted were the positive kind instead of the negative cold/forced sales approach. As in politics, there are good scenarios and bad scenarios; positive and negative. In good sales, both of the parties feel like they're getting a good or fair deal. In bad sales, one of the parties is trying to pull a fast one on the other party.

            Negative sales models are often in evidence in organizations where the business model itself is unsustainable (most common in my opinion) or where the owner i
        • What you folks in the US need is a law similar to the Australian Trade Practices Act and an agency similar to the ACCC (Australian Competition and Consumer Commission). Here in australia, if a store told you that you had to buy the bundle even though they were advertising the stand-alone unit, they would be hit by the ACCC for it. (if they sold the bundle and advertized only the bundle at the price of the bundle, thats fine since they never said you could buy the stand-alone unit from them)

          • False Advertising (Score:3, Informative)

            by Kadin2048 ( 468275 )
            We have the same thing in the U.S., here it just falls under the large umbrella of "false advertising," which varies state by state but usually allows a person to sue for damages. However it's sometimes rather tough to prove damages and I have a feeling in this instance that the company can probably protect themselves (as they're doing) by firing all the people involved and swearing they won't do it again.

            But if you did run into blatant false advertising, the way to go would be to contact your state's Consu
      • Actually, that's not really "bait and switch", as I understand. More like "bait and gouge" or something. "Bait and switch" is generally when they bait people to come into the store for some really great deal (i.e. "$200 laptops"), only to claim they have "sold out", and then try and sell some more expensive item to the customer instead. I'm actually not sure what the legality of this is though. I've noticed that Best Buy makes a point to talk about the minimum number of items like $500 laptops they have
        • It is bait and switch [wikipedia.org]. They're told the "console-only" packages have sold out, but the bundles are available. They bait with the console-only, and attempt to switch to a higher-priced package when the consumer comes in.

          And yes, it is illegal (at least in most states... I don't know if it's federal). The FTC has guides [ftc.gov] against it, and Best Buy violated a good number of them.

          However, there are "CYA" wordings that most places use, although Best Buy might not have. Usually they'll say "stock limited to quantity
          • Nice to know.. they almost always do that with their "$300 Full Systems." Fortunately I went along with my mom, who actually likes sending in rebates, and didn't let the salesman "upgrade" her, or sell her any additional crap*. And they sure tried. Everything from "We're out of them at this location," to "this is a much better model for your needs" to "Naturally you'll want spyware protection. You guys don't want spyware, do you?" to "You can upgrade to this DEE-LUX monitor, which is 1" larger, for only
          • Hrmm, I have no doubt that that's what they are doing, but I still question whether "bait and switch" is the term that applies here. Heck, even from the wikipedia definition of the term, they say: "A bait and switch is a form of fraud in which the fraudster lures in customers by advertising a good at an unprofitably low price, then reveals to potential customers that the advertised good is not available but that a substitute good is." - I've always understood this to mean a substitute good as actually some
            • Technically a bundle is a good different from any of its components. Doesn't matter whether the additional price nets you things built into the good or things that come separately, as long as you cannot buy exactly what they advertise for the price advertised it's bait and switch (unless, of course, it's an unintentional error but those don't happen often). Even advertising the XBox 360 Core and only having the Premium in stock could constitute bait and switch but I doubt anyopne would really complain about
            • Huh?

              I think you're wrong in your example. If I come into the store for product x, and when I get in there find out that it either never existed, or they had an unreasonably low number of them to begin with, and they attempt to upsell me to product y, that's a bait-and-switch. The key though -- and what makes a fraudster different from a "good salesperson" -- is that the fraudster intends to do this from the beginning.

              Plus, a product standing alone, and a product that can only be sold as part of a bundle, mi
        • "I've noticed that Best Buy makes a point to talk about the minimum number of items like $500 laptops they have in each store.............. it made me think that they could avoid being accused of bait and switch as long as they had at least a certain number of the products to actually sell."

          If you talk to the employees about the minimum number, you will generally find out the store received less of the advertised minimum for most of those items. While around here at least they will usually have more of bon
      • A good friend of mine worked for GameStop for several years. It wasn't until after he left the company that he started to tell me the real dirt. Apparently there was one regional manager who was actually an inspiration to his entire team; a really super guy with an excellent moral compass. He did his damndest to protect his guys in the field whenever they stepped outside of the frequently evil corporate line.
        This regional manager died, and when he did the last remaining shred of soul the company had die

    • Re:Why is bundling wrong? (Score:3, Informative)

      by Anonymous Coward
      First, they advertised that they'd sell the thing you really wanted at the price they were supposed to charge. Then people got there and discovered that there were no Xboxes being sold unbundled despite the advertisements. http://www.theinquirer.net/?article=27963 [theinquirer.net]

      Second, this policy was not approved by the upper best buy management, thus the heads of the lower managers who told the stores to do this rolled.

      You may act all shocked that managers are getting fired, but I bet you'd do the same to any employee
    • It wouldn't be wrong, except for the fact they advertised that you could buy a basic unit for a specific price, and then wouldn't sell you just that unit at that price. It's false advertising. If they hadn't advertised the basic unit by itself, that would have been honest and ethical. But since they did advertise it, they had a moral obligation to provide it as long as it was physically possible to do so.
      • But since they did advertise it, they had a moral obligation to provide it as long as it was physically possible to do so.
        By and large, most companies don't care about moral obligations unless they affect the bottom line. But because of their advertising, they had a legal obligation to sell the system at the advertised price - this was a CYA move on the part of Best Buy, nothing more.
    • The problem with bundling is Bestbuy advertised the systems at the regular price - but then some locations did not honour this. They *ONLY* sold the systems as a part of a bundle - and only told people of this after they had lined up for hours.

    • Bait and switch, not bundling (Score:5, Informative)

      by hellfire ( 86129 ) <deviladv AT gmail DOT com> on Monday February 13, 2006 @02:55PM (#14709779) Homepage
      You have to read all the articles, not just the attached one, but the three articles at the beginning of the referenced one. This wasn't just bundling, this was bait and switch.

      Here's an example snippet from one of those articles:

      TMCnet news reports similar events in Spokane, WA. Best Buy's Sunday ad offered the Xbox 360 for $299 dollars, but a sign was posted at the store on Tuesday as a "correction notice" to inform customers that they could only buy package deals starting at $569.93.

      If best buy advertises something for $299, and doesn't actually have that item but has a similar one that's more expensive, that's bait and switch, and it's illegal in the United States. You cannot advertise one price for one model or package then sell another model/package that has more features but at a higher price simply because you never had that model. The ad said they were selling it so they better sell it. In fact, the law states that those people had the right to demand the higher bundle for the lower price, but I infer from the article that Best Buy obfuscated this enough so that few to none of the people scammed were able to catch that when they first went in.

      And to top it all off, companies should and do go out of their way to avoid these mistakes, because the law also says that if a company does make this mistake, customers have every right to take advantage of it. This is to make sure companies don't up and use the "oops, That's a mistake in the ad we don't stock that. Gee, that's 4 mistakes in just one month, sorry, but I do have the higher end model for you if you like."

      If it were a simple stock out that's one thing but some stores never even stocked one of the nonbundled console.

      This smacks of a small time conspiracy but it's most definitely illegal. Best Buy is cleaning house to make it look like they care and showing good will so as to deflect any consumer lawsuits.
      • If best buy advertises something for $299, and doesn't actually have that item but has a similar one that's more expensive, that's bait and switch, and it's illegal in the United States.

        Best Buy does (or used to do) this every single week with low-end laptops. They advertise a $599 laptop, but only have two of them per store. This is not significantly different than not having the item at all. Maybe this "housecleaning" means they won't do the continual bait-and-switch with popular items? I doubt it.

      • Out of curiousity, how does this differ from supermarkets and similar where they occasionally have a notice saying "Dear customer, in our weekly advertising circular the price of X was misprinted as $5.99/lb. The actual price is $15.99/lb. We are sorry for any inconvenience."? Is that entirely illegal?
    • I don't think it's the bundling that got some managers in trouble - it's that the corp. ads didn't mention the bundling - so now some asshat could file a silly lawsuit. A sensible person realizes that getting the "hot" new system at list without any strings is - unusual. Just as a sensible person knows not to step on the very top "step" of a step ladder. I used to work at a place that sold VG stuff - we got no employee discount on systems - because at list we were already selling them AT cost. So we alm
      • Erm, no.

        The advertising was printed up by corporate, which indicated what should have been happening in the stores. I've worked retail -- you don't get much say at the store level into what kind of promotions you're going to sell or not; what gets printed in the flyer is what happens. If the flyer says "Widget x now $150!" you'd best have Widget X on the shelves for $150, or you're going to have problems.

        What Best Buy is claiming (and based on my own retail experience, seems quite believable) is that some m
    • I would imagine that the REAL problem is Microsoft. BestBuy bundling stuff makes BestBuy more money, but Microsoft probably is more concerned with getting the machines sold as soon as possible. Especially if Best Buy is bundling in crap that isn't made by Microsoft,then there would really be some pressure from Microsoft.
    • If your car dealer told you you could only buy a new car if you also bought $x worth of fuel or servicing that were only valid at certain locations, you would have every right to complain.

      Or if your supermarket told you you could only buy brand x milk if you also bought brand x bread too, you would have every right to complain.
      Same thing here.
      • No, that's not a problem at all.

        Your car dealer or your grocery store would both be within their rights to do those kind of promotions. Bundling, by itself, isn't illegal.

        Look at cable TV and cable internet -- cable internet alone (if you can get it) might cost $80 a month, but buy it along with digital cable television, and it's only $35 a month!

        You have every right to complain, but nobody is going to take you seriously. There's nothing wrong with that promotion (provided they're not abusing a monopoly pow
      • Yep and I would decide if I wanted those things and either buy them or I would turn on my heels and go shop elsewhere.

        Are you expecting stores to anticipate how weak willed and dimwitted the thickest of us are and treat us all in this manner?
    • Why is it wrong? That's an issue for economic philosophers to debate. But Best Buy didn't fire people for doing something that may or may not have been wrong - they were fired for pissing off a bunch of young loudmouthed consumers who immediately started bitching about it online, which lead to bad publicity that will cost a hell of a lot more to fix than the bundling made for Best Buy. Anyone stupid enough to do something like this is a big liability to a firm like Best Buy, so it makes a lot of sense to ju
    • ,I> I don't get it, what is wrong with a store saying "Sure I will sell you this thing you really want, but at the price I want to charge. I will even include some crap you don't really want, but you still have to pay the price I want to charge"

      Funny, I never see comments like this at +4 insightful when rippable audio CDs are discussed. Just a lot of casuistry regarding copyright infringment.

      • I think the difference is the CDs have crap you do not want included by the manufacturer, like a rootkit bought to you by Sony! If you want the product, you have to have the crap, no matter where you buy it. This is the case of one store trying the same thing, when you could walk to another store to get it.

  • Meanwhile... (Score:3, Funny)

    by voice_of_all_reason ( 926702 ) on Monday February 13, 2006 @01:48PM (#14709011)
    LAWYER: What of the reports of the Rebel fleet massing near Best Buy?

    GATES: It is of no concern. Soon the Rebellion will be crushed and young Sony will be one of us! Your work here is finished, my friend. Go out to the command ship and await my orders.

  • Housecleaning (Score:3, Funny)

    by Presidential ( 805793 ) on Monday February 13, 2006 @01:49PM (#14709015)
    About time someone cleaned up those stores a bit. Dirty bastards with all that yellow and blue...nauseating.

  • Lemme git this straight... (Score:5, Interesting)

    by Golias ( 176380 ) on Monday February 13, 2006 @01:49PM (#14709016)
    They put policies in place which make retail managers feel pressured to pump up their sales figures by "forcing" excessive bundles on desperate (and foolish) pre-Christmas X-Box 360 buyers.

    Then, when they get heat for it, they respond by firing the retail managers, but keep all the largesse of the whole scam firmly in their pockets.

    And we are supposed to take this as an indicator that they are interested in doing the right thing?

    • Re:Lemme git this straight... (Score:5, Insightful)

      by ThePlague ( 30616 ) * on Monday February 13, 2006 @02:31PM (#14709526)
      It's the classic "bad apple" tactic. Just have very stringent policies in place, but make the goals such that it's either difficult or impossible to meet without breaking those policies. If no one notices, promotions all around. If someone calls them on it, then an easy scapegoat and much haughty pointing to the policy. Either way, the organization wins. Abu Grahib was a perfect example of that and this Best Buy ploy is another. Of course, I'm not saying they are of equal importance or ramification at all, rather the technique is identical.
    • Most every saleman/sales manager position I've ever heard of has a commission on sales, either a flat rate or depending on the margin of that product. You always encourage more sales and more high-margin sales, and I think every salesperson understands the basics of that. So far all well and normal company policy, but in this case it seems a manager stepped over the line. Someone has been fired so they can respond that they've "taken care of it" to anyone making a fuzz, but they wouldn't go out of their way
      • Most every saleman/sales manager position I've ever heard of has a commission on sales, either a flat rate or depending on the margin of that product. You always encourage more sales and more high-margin sales, and I think every salesperson understands the basics of that.

        It may be different in the US, but here in Canada, Best Buy employees are not on commission (or so they say - they even advertise this). If it is the case, I presume there is still some kind of compensation related to sales (otherwise what'
        • As a former BBY employee here in the US, I can say that we were also not on commission. However, the only 'compensation' we got for selling more was keeping our jobs. If you didnt sell the arbitrary number of product type x, you were moved to a slower department in the store or some equally shit position until management could find a reason to fire you -- ie: coming in late on days where the schedule was changed without your knowledge.
    • Price of corporate loyalty. Sure, you've been somewhere for years, so what? You're still disposable.
    • "And we are supposed to take this as an indicator that they are interested in doing the right thing?"

      Well, they didn't have their customers [slashdot.org]arrested [slashdot.org] this time...

    • >but keep all the largesse of the whole scam firmly in their pockets.

      Very soon after the incidents occured Best Buy corporate stated that anyone who purchased a bundle could return any/all parts of the bundle to any Best Buy and get a full refund on the purchase price, even if the items were opened.

      Yest Best Buy is evil. Yes Best Buy sucks. But, in this at least, when corporate found out about what was going on they attempted to rectify the situation to the benefit of the customers.

  • I'm not so sure how to feel about this (Score:3, Interesting)

    by XxtraLarGe ( 551297 ) on Monday February 13, 2006 @01:53PM (#14709072) Journal

    Best Buy had to sell the 360 at a certain price point, and that price was seemingly far below what the demand for the 360's was. So from a certain perspective, the bundles make sense if you're trying to make supply meet demand.

    On the other hand, we told our son we'd get him an XBox for Christmas since the price should go down with the 360 coming out. I figured they would go down to $129 or maybe even $99 if we were lucky. And then what happens? They throw in a cruddy racing game and jack the price of the original XBox UP by $30 to $179! The racing game isn't too bad, but it isn't a game we would have chosen to buy if it weren't bundled with the system. I don't like what they did, so I can understand peoples' complaints, but I see very little difference between what Microsoft has done with the original XBox and what Best Buy has done with the XBox 360.

    • The price of the Xbox dropping just wasn't going to happen. You know why? That hard drive they put in there, the one they moved externally and everyone attacked them for. Hard drives don't go down in price, just up in size. There's a minimum that they're going to cost, and that puts a higher floor on Xbox prices as compared to other hard drive-less consoles.

      And a little thing to note - Forza is not a cruddy racing game, but actually pretty darn good.
      • Forza is not a cruddy racing game, but actually pretty darn good.

        Maybe so, but he actually wanted to get his "son" DOA volleyball and GTA.
        • Forza is not a cruddy racing game, but actually pretty darn good.

          RE: Forza. You'll note, I did say "not too bad", but he didn't want a racing game. He wanted Morrow Wind and Star Wars KOTR, both of which I would pick if it were for me as well. But I already have enough games I haven't played on my PS2, and also for my Powerbook.

          Maybe so, but he actually wanted to get his "son" DOA volleyball and GTA.

          I already have GTA on my PS2. My stepson doesn't get to play rated "M" games unless we decide that they a

    • The difference being best buy advertised at a lower price. You merely 'figured' the X-Box would go down in price. Now maybe its just because im not looking to buy a second X-Box but I would never have assumed MS would lower the price. Hope maybe, but not assume. While I would assume that if a shop has something advertised for a price then that is what I can get.

      Not to mention that the X-Box is still sold standalone. If the shop didnt bother to have standalone units thats their fault not Microsofts.
    • that BestBuy has to sell the xbox at the price microsoft tells them to sell it at. It's called price fixing. Microsoft could fine BestBuy for jacking up the price or not selling the xbox unless people were to buy accessories with it. Our BestBuy just had a line outside of people waiting to buy xboxes, and gave out tickets to people, and when they came in, they let the first people buy the xboxes, accessories or no accessories. The only thing is, there is almost no margin on an xbox 360 for the retailers. Sa

  • $2 bill fiasco (Score:2, Interesting)

    by sunderland56 ( 621843 )
    Interesting that BestBuy took action against stores that forced bundle sales. They did absolutely nothing about the store who had someone arrested for using legal US currency [morons.org].


    BestBuy: good concept, bad execution.

  • Greed Kills (Score:1, Offtopic)

    by drewzhrodague ( 606182 )
    It is a shame that what once was some sort of religeous holliday, has now been pounced on by the retail industry as a major source of income. When I go xmass shopping, I don't feel the warm feeling of shopping in the snow with other hurried patrons. Instead, I am filled with fears of inadequacy, at not being a good consumer, or gift giver. However, it is more distasteful to be taken advantage of by the greed of the retailers.

    War on xmass it is, then.
    • I agree with you on this. Christmas is a non-day for me. I don't go anywhere NEAR malls for the 4 weeks preceding, and the week following. I don't buy presents, and I don't receive any. For those reading, scoff if you must, but I'm willing to bet that I get through it MUCH better off than most people (no debt, no stress).

  • They have to move those titles somehow... (Score:3, Informative)

    by the computer guy nex ( 916959 ) on Monday February 13, 2006 @02:38PM (#14709603)
    "They have to move those titles somehow..."

    The titles weren't the problem. Best Buy left it open which games you could buy, and there were multiple games that everyone wanted (Perfect Dark Zero, COD2, PGR3, Kameo).

    The problem was many Best Buy stores *forced* you to purchase certain accessories. One of the bundles included 2 games and a wireless adapter (waste of money) the other forced controllers and recharge packs.

  • Scapegoating? (Score:1, Flamebait)

    by dtfinch ( 661405 ) *
    Problem: Customers are offended by your rotten strategies, and are starting to boycott your stores.
    Solution: Fire a bunch of lower managers. Blame it all on them. Sure, it's rotten, but whatever works.

  • Can't resist (Score:4, Funny)

    by the-amazing-blob ( 917722 ) on Monday February 13, 2006 @03:03PM (#14709859) Journal
    The big yellow inquisition did not stop there, and several other managers and assorted white collar workers were given an escorted walk to the parking lot.
    NOBODY expects the big yellow inquisition!
  • I got my 360 at Costco, bundled with an extra wireless controller, Kameo, and 1 play and charge kit. That was the only configuration they offered. But I was going to buy both accessories for sure and Kameo was already a "maybe" for me. So if you calculated the bundled accessories at retail price (Have you seen *any* 360 stuff below retail? Not me.), Kameo came out to a price of $10. So basically, it was $50 below the total retail price of the items in the bundle. I acceptd a lack of choice in exchange for a
  • This article assumes that this is not a witchhunt. To me, this sounds a lot like corporate ass-covering.

    I would not be surprised if the people at the top of this fiasco covered through their underlings to the lions to save their own asses.
  • This is supposed to be Slashdot.

    Let's look at why this happened:
    • Microsoft restricts unit for-sale prices on items (like everyone in this industry), keeping vendors from charging natural prices based on availability.
    • Microsoft limits stock [slashdot.org] to create an artificial shortage.
    • Best Buy execs push $/sqft numbers as paramount, replacing underperforming managers.

    What happens? The people at the end of this chain get cut off. Aren't we supposed to be hating on Microsoft here?

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