Washington post: Investors want MS to kill Xbox
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Wolfgunblood Garopa
Member
A paywall that users were happy to pay for the features that it offered. This really isn't a debatable issue- XBL was a huge part of the evolution of online multiplayer. Whether or not you like to play online or what your personal opinion of the paywall is doesn't change the facts of the matter.
enanogrande
Member
~18% as of last year, and showing some growth. Nowhere near Google at 66%, but still somewhat respectable.
http://searchenginewatch.com/articl...in-Search-Market-Share-Bing-Steals-From-Yahoo
Randolph Freelander
Member
I've long felt that the Xbox platform is a lost cause, as for their original intent. The Xbox One might end up being a good gaming platform, but that was never the point. Xbox simply cannot control the living room, never will, there is too much competition. Cable and satellite boxes already do a lot of what Microsoft is trying to do with the television. Smart phones and tablets are already doing a lot of it. Televisions are now already doing what Microsoft is trying to do. There's growth here, but there's more growth in the number of players, so it's difficult for Microsoft to achieve their intent. It's not about selling 50 million copies of Halo, never has been. If their box can't control the living room, there is no reason for them being in the console business and they'll get out of it.
The other side is already touched upon in this thread, which is the opportunity cost of the Xbox platform. Even if they could control the living room, or operate profitably in that space, it's not enough. If those dollars could be more profitably invested in other areas, then that is what they should do. It's similar to if you had a choice between 2 investments, one returned 15%, one 5%, you obviously take the 15. Some of Microsoft's investors feel like they could take those dollars and resources, invest elsewhere, and make more.
The other side is already touched upon in this thread, which is the opportunity cost of the Xbox platform. Even if they could control the living room, or operate profitably in that space, it's not enough. If those dollars could be more profitably invested in other areas, then that is what they should do. It's similar to if you had a choice between 2 investments, one returned 15%, one 5%, you obviously take the 15. Some of Microsoft's investors feel like they could take those dollars and resources, invest elsewhere, and make more.
and if you look at the statement i made i said that in my opinion basically everything they've done has been bad
xbox live influencing the evolution of online multiplayer systems is part of that
SwiftDeath
Member
That is much greater than I expected. I wonder how much of that is from Windows Phones or is it just web browser searches? Although now that I think about it if it included mobiles then android would trounce it regardless so respectable either way.
Video games are small time for MS, small beans compared to where they make their money. They could be investing X-bucks into something else that won't cost them billions every 5 years to update, plus tons of exclusive contracts etc. Investors don't think the ROI is high enough and so want it gone. From their standpoint I don't blame them. MS used to dominate whatever it got in bed, but since it began trying to put out all this hardware they've stunk up the yard. So if they dropped it I'd not be surprised nor would I shed a tear. And yeah Balmer and Gates may have some power, but that power only goes so far if more and more losses keep adding up and even more importantly, they see danger in their CORE business, at which point they'd need to focus on the core business.
VicDaMoan03
Member
Samsung Xbox has a nice ring to it.
Part of the money that bing is losing is from paying people to search on bing.
A fair bit of it has to come with MS deals with websites to have Bing be the map direction search they embed.
polyh3dron
Banned
I can't tell if this piece is using any new information or just speculation off of the piece about ValueAct a few months back.
Drunk Zeppelin
Neo Member
That is certainly an interesting idea. Part of me wants to see this happen just to see the result.
That's exactly what it's doing.
SamBox?
Eh? Online multiplayer was already huge on PCs. Xbox brought online multiplayer to consoles, but it's not like Sony wasn't also moving into that direction. And lol @ most trusted network for online multiplayer. PC online multiplayers (mostly) shit all over Xbox Live, which is why their attempts to bring Live to PCs failed miserably, and it's not like the basic functionality of PSN is worse in any way. Sony is(or, really, was, they've mostly caught up) a bit behind as far as some social aspects go with PSN, but they've fixed most of those with PS4 & Vita and it's not like the actual online multiplayer ever worked worse on PS3 in terms of lag, connection problems etc.
Paracelsus
Member
People are willing to pay for Gran Turismo Prologue and Ground Zeroes.
It doesn't mean it's not terrible.
Windows has to stay relevant in the consumer market, because that's where their competition is playing. Apple and Google are gaining, or already have everything they need from hardware, OS, and/or services to enable consumers and businesses the easiest and most complete online ecosystem for fun and work. The more inroads they make on consumers the less relevant Windows, Office, Azure, etc. become.
Productivity and entertainment are going all digital and moving to the cloud. It's a software and services future. The best long term strategy you could have in an all digital future is hooking someone into an ecosystem early, letting them build their productivity and entertainment library on a single account. They become invested, and then the services provider becomes invested in keeping them in the ecosystem. Apple and Google already have alternatives to nearly everything Microsoft does, so the more consumers they get into their own ecosystems the more they'll invest in keeping them there.
Don't think out just a handful of years. Look at the lifetime value of a consumer in an all digital world. What would you do? I would continue investing in mobile, cloud, productivity, and entertainment, with a focus on delivering high value services and experiences that draw people into the brand.
Killroyskbg
Member
DRM and other stupid ideas put a pen in the eye for many people previously waving the Xbox flag.
polyh3dron
Banned
Seriously, there is like no new news in the piece. Someone could have posted this on GAF.
I just don't think ms has or will ever have the reputation to be able to make high profits on hardware like apple. They should focus on driving adoption of their software, and windows 8/9 is made for convertibles... The price of a surface pro is hard to swallow though (in general, it's a great product but people will be lenovo or dell instead)
Microsoft would never sell the full Xbox division. If they concluded that their entertainment and consumer focused products no longer held value, they would auction the individual IP's and assets to the highest bidders.
Yes this post is short, but the correct answer is always a short answer.
Yes this post is short, but the correct answer is always a short answer.
Does this really affect a company with $84B in cash though? They really aren't constrained from doing anything by lack of capital.
digoutyoursoul
Member
badcrumble
Member
This is true. There are companies who would want Kinect tech and patents but have no interest in purchasing the Halo IP, and vice versa. Microsoft would get a better deal selling the division piecemeal than by trying to sell the entire thing as one big block.
Randolph Freelander
Member
It's topical enough. There's a new CEO, the strategic direction of the company is now in new hands, and consumer devices have long been a contentious subject for Microsoft.
Wolfgunblood Garopa
Member
That's actually not the case at all, but it's an understandable take. On the surface it seems like PSN is the same thing.
Also, this is a conversation about Xbox and online multiplayer for consoles, not the PC. But to your point, not until Steam has there been an online multiplayer 'platform' on PC that incorporated some of the social features that made XBL the standard.
Randolph Freelander
Member
The Crimson Kid
what are you waiting for
The article makes a fantastic point when it says that their R&D division has plenty of amazing ideas that the company refuses to build into actual products because it doesn't fit within their traditional sales model. The few glimpses that we've seen of things that they work on in there are pretty incredible. I still vividly remember the Courier, which would've done gangbusters if it had come out in 2008/9, but MS wouldn't produce it solely because it didn't run a proper version of Windows. There are likely plenty of great exciting products just waiting to be developed in there, and MS needs to be far less stingy about turning those ideas into reality.
I would much rather see the money they throw at Bing and Xbox go towards making products out of the more radical ideas developed here.
MS always had its eye on the living room, but never had much to show for it. They saw Sony doing huge business with the PlayStation, and determined that they had to drastically move to prevent Sony from taking over the living room. It's been widely confirmed that was the main reason behind the Xbox, and they were serious about stalling Sony.
How serious? Microsoft wanted to outright BUY Nintendo for $25 billion dollars. What we saw with the original Xbox was actually pretty compromised from what they were willing to spend.
They've been following this path with the goal of "taking over the living room" for over a decade now, but the times have changed enough that such a goal is a fools errand. Nowadays, the box under the Tv matters much less than the services it can access. No one will be buying a $500 XB1 unless they are interested in gaming because for those that just want to watch content are much better off spending a fraction of the cost on a Apple TV, Google TV, or a Roku. Even Chromecast would be enough for many people.
In a couple of months there will be a new version of Apple TV. It will likely include some version of the App Store as well as Siri voice recognition. What does Xbox offer that warrants paying 5x more over that for non-gamers?
I believe that the situation MS is in now with XB1 is much more costly than other consoles have been post-launch. Most of this is due to the extreme lack of internal game development studios that MS has combined with the massive costs of inefficient game development. I can't think of a more cost-inefficient way to ensure exclusive content that what MS is doing now - building a few (not enough if they're serious IMO) new first party studios from scratch while paying huge amounts for development of big third-party exclusives (practically their entire launch and 2014 lineup) as well as paying for exclusivity on some games (Titanfall).
Most consoles have had a strong established first-party lineup, which enables those teams to share technology and coordinate on development to save costs. This kind of approach is what enabled Sega to release such a huge volume of titles on the Dreamcast on a relatively small budget and what enables Sony to produce an Uncharted game for 25 million and then see plenty of other Sony games using techniques learned from that game to make a better quality product quicker and cheaper than if that team were to develop those techniques on their own. It's kind of the same reason why EA now only uses two engines for 3D game development now instead of having each team make and use their own engine like they used to.
I would much rather see the money they throw at Bing and Xbox go towards making products out of the more radical ideas developed here.
MS always had its eye on the living room, but never had much to show for it. They saw Sony doing huge business with the PlayStation, and determined that they had to drastically move to prevent Sony from taking over the living room. It's been widely confirmed that was the main reason behind the Xbox, and they were serious about stalling Sony.
How serious? Microsoft wanted to outright BUY Nintendo for $25 billion dollars. What we saw with the original Xbox was actually pretty compromised from what they were willing to spend.
They've been following this path with the goal of "taking over the living room" for over a decade now, but the times have changed enough that such a goal is a fools errand. Nowadays, the box under the Tv matters much less than the services it can access. No one will be buying a $500 XB1 unless they are interested in gaming because for those that just want to watch content are much better off spending a fraction of the cost on a Apple TV, Google TV, or a Roku. Even Chromecast would be enough for many people.
In a couple of months there will be a new version of Apple TV. It will likely include some version of the App Store as well as Siri voice recognition. What does Xbox offer that warrants paying 5x more over that for non-gamers?
I believe that the situation MS is in now with XB1 is much more costly than other consoles have been post-launch. Most of this is due to the extreme lack of internal game development studios that MS has combined with the massive costs of inefficient game development. I can't think of a more cost-inefficient way to ensure exclusive content that what MS is doing now - building a few (not enough if they're serious IMO) new first party studios from scratch while paying huge amounts for development of big third-party exclusives (practically their entire launch and 2014 lineup) as well as paying for exclusivity on some games (Titanfall).
Most consoles have had a strong established first-party lineup, which enables those teams to share technology and coordinate on development to save costs. This kind of approach is what enabled Sega to release such a huge volume of titles on the Dreamcast on a relatively small budget and what enables Sony to produce an Uncharted game for 25 million and then see plenty of other Sony games using techniques learned from that game to make a better quality product quicker and cheaper than if that team were to develop those techniques on their own. It's kind of the same reason why EA now only uses two engines for 3D game development now instead of having each team make and use their own engine like they used to.
A company with just over $80B in liquid assets isn't in the business of undermining divisions that it's already made investments in. The opportunity cost, in this case, is literally zero.
there's no way they'd sell the patents to other tech companies, they'd either start patent trolling themselves or, more likely, pass them off to an existing troll firm like intellectual ventures (founded by ex-microsofters and part owned by microsoft) in exchange for a cut of whatever settlements/judgements come their way
What makes you money today is not what makes you money 10 years from now, especially in tech. This is why many companies are starting to tank, they weren't defeated in their core market, but people started doing something else. Windows was undefeatable in the PC space but that stopped mattering when mobile became bigger than PCs. This idea of doubling down on what you've been good at is a short-term strategy. You need to expand what you are good at and be making roads for the future. Xbox has immensely helped Microsoft's consumer brand and that's important because even not profitable they can build off it (Sony's like this too). We often talk about the consumerization of business products, the CEO wants iPad development because he has an iPad at home, employees start bringing in their Android and iPhones. People start using at the office the software they like at home. This turns people away from Microsoft. Now-a-days if you have little consumer presence you won't have business presence and therefore killing less profitable consumer sectors for more profitable business ones is short-sighted. This is Blackberry in a nutshell.
They should think about what makes sense to invest their future efforts in, as always, for any public company.
How will a dollar invested in the Xbox brand pay off compared to one invested into their enterprise products (short term / long term)? Are there other values to leverage, and do they really offset the difference in payoff? And so on.
How will a dollar invested in the Xbox brand pay off compared to one invested into their enterprise products (short term / long term)? Are there other values to leverage, and do they really offset the difference in payoff? And so on.
My Xbox consoles have never been my most played console, let alone game platform, but it'd still be a big shame to see Microsoft go.
There are few companies out there that could fill Microsoft's place - and they seemingly aren't interested in that area of gaming. Companies like Samsung would ruin it - they're unoriginal crowd followers.
I could see why they'd get rid of it, especially at this moment in Microsoft's history, but I hope it doesn't happen.
Shrinking market?
There are few companies out there that could fill Microsoft's place - and they seemingly aren't interested in that area of gaming. Companies like Samsung would ruin it - they're unoriginal crowd followers.
I could see why they'd get rid of it, especially at this moment in Microsoft's history, but I hope it doesn't happen.
Shrinking market?
DeviantBoi
Member
The death of the XBone or the Wii U would make the PS4 truly the successor of the PS2 (which killed the Dreamcast).
Disaster Nebraska
Banned
What you're describing would be like a Depression Era coal baron who sponsors soup lines (and therefore people love him) becoming more wealthy because he is "gaining mindshare".
Xbox fans are the peasants in the soup line. You'd be surprised by how little Microsoft's mindshare from Xbox actually matters when it comes to their more profitable sectors (servers, Windows, and Office). Mommy bloggers still go with the cheaper Wordpress/Linux shared boxes while the big businesses (who certainly don't care about what an Xbox is) will often go for a Windows server. Heck, better example? Pretty much every videogame fansite (even if it's for Xbox/Windows) my company deals with is hosted on a Linux server.
Palette Swap
Member
I'm not sure all these MSO, server or cloud customers can qualify as fans or would give much of a fuck if bing was killed tomorrow or if devices at large were spun off.
Dreams-Visions
Member
Common knowledge. MS created Xbox to get a piece of the living room pie, and through a multimedia PlayStation would takeover if left unchecked.
SmokedMeat
Gamer™
I don't wish any ill will on the employees, and hope they'd land on their feet. But yes, I would love to see Microsoft out of the console business. It's not born out of some console war mentality as I loved the Xbox and the 360. But the shit they tried to pull with the Xbox One was it for me.
Raonak
Banned
I'd be okay with that. ms makes great software (windows, office, visual studio, server) but their jump into consumer devices has been such a waste. I'm inclined to add the bone to that list after the DRM debacle. if be preferable if they jumped out and Nintendo or someone else got their head in the game
I'd say it probably had more to do with Microsoft's licensing technology behind the Dreamcast not playing out because of the state of that platform, so they got more directly involved. I think you're working with made-up or contrived information. Also, Microsoft's long-term goal of a device that bonded entertainment, productivity and computing with the livingroom.
Dreams-Visions
Member
We're talking about profits. I doubt .NET and Visual Studio register, however popular they may be as tools.
Look back to 2005/06 and see what Sony did when they felt they had the market to themselves...
I loathe the direction MS took the Xbox brand in, but let's not assume that the PS4 would be as attractive as it is if Sony hadn't gotten their ass kicked last gen.
Dreamgazer
Member
I'm always amused that people tend to forget that there was time less than 20 years ago when Apple's OS 8/9 was a ugly OS and Apple hardware were mediocre machines that no mainstream user would ever care about (not to mention unnecessarily heavy for their specs.)
Any reputation can be changed in a second.
Although that's the problem with MS. No one has the guts to change that corporate culture like Job's did with his return to Apple.
But the thing is, the Playstation brand is more profitable for Sony than the Xbox brand is for Microsoft. And even if Sony goes down, there's a higher chance that the Playstation brand will be bought by another company more so than the Xbox division will because of all of the huge losses that the Xbox brand has racked up.
Gaming has existed long before Microsoft came into the picture, & it will still go on, with or without Xbox.
Randolph Freelander
Member
The opportunity cost is the cost to continue to operate, and the profitability thereof, compares to the costs & benefits of doing something else. Profits and losses in past years have no bearing, nor do prior investments. That's all sunk.
They're not going to drop the Xbox division just because it was in the red for 10 years, because that's the past and nobody cares. But at the same time, if it's going to only produce low returns going forward, it's basically a distraction, one they might decided they don't need, or one they think they could better use those resources elsewhere. It could be a profitable business, but that doesn't make it one worth having.