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[Exile20]

This might be a smart business decision in the long run.. But as others have stated, it would be super dumb of them to bail on it right now, after spending all the initial costs of R&D and producing/launching a console...

I expect that if they did bail, it would be in a few years after they recoup some costs.

I personally think the PS4 on a hardware level is blowing the XBONE away right now, but if you look at the software on the docket and sales numbers, its hard to think the XBONE doesn't have a solid shot still!

That is a fools dream. Gaming is far too expensive and the audience is not big enough to sustain it. If Amazon does enter the market with a solid effort, we will have mobile, Amazon, Nintendo, MS and Sony, that is just too crowded.

Mobile is successful because it is cheap and piggy backing off of cell phones which everyone has.

 

[mephixto]

Sell the Xbox brand to Samsung or another consumer electronic company while it has some value.

 

[Ken Masters]

Well, he like many, are enjoying because they're not facing those problems? And it'll receive continuous improvements (in fact tomorrows Xbox one update).

I'm sure patches will improve it but if the tech isn't there, there is only so much you can do

 

[kinoki]

The only reason I can see for abandoning Xbox is the negative press it's getting. And the amount of effort they need to keep the PR positive despite there being very little to cheer. Microsoft has always been a boring and stable company. The only times it tried to be hip it made a fool of itself but we still loved our Outlook and Flight Simulator.

With the Xbox the company is acting like a spoiled child whose parents have enough money to buy anything. While not unpopular it still manages to annoy gamers with money-hatting. Underdeveloping a console and holding back 1080p/60fps graphics for another generation. While journalists and internet zealots do their best to defend it, it still fails to be the number one place to game.

If anything they really need to go in whole-heartedly and be honest. They need to be doing this because they love games. Both Nintendo and Sony have shown they actually care for gaming and want to develop the culture. Microsoft seems to have little interest in that, from where I'm standing. And if they don't I really do hope they get out of the biz and leave it to Amazon, Apple and Google to enter the ring.

 

[SPDIF]

This is so par for the course for Microsoft. The Xbox 360 was a huge success but this company just has zero sense of product confidence and follow-through. Their solution every single time is to release something that tries to be innovative (but in truth is just annoying to the consumer) then ignore feedback from the users, and subsequently can the product because it isn't perfect and they have no interest in fixing it.

Let's list some failed Microsoft products here:

• Zune
• 'Clippy'
• Tablet PC (the early one)
• Windows Vista
• Smartwatch
• MSN messenger
• Pocket PC
• Windows Media Center
• Games For Windows Live
• Windows Phone (you know they'll cut that soon)
• Bing (see above)
• Possibly Surface (see above)
• Possibly Xbox One (see above)

All this just speaks about a company with no confidence in their vision whatsoever. Look at stories like the PSP, the iPad, the 3DS, probably the Vita and WiiU soon, for God's sake. These are cases of companies making a product that people didn't "get", but still having the stones to pursue and support it. They didn't crumble under feedback and cut it because it wasn't profitable. In the end this rewards the early adopters and creates a sense of confidence in the creators. What better way to get someone excited about your NEXT product than to have your last one be an unexpected success?

But alas, MS as usual is focusing on the short term and possibly punishing those who "bought in" to their early hype. While I don't think they're going to "shit can" the Xbox One at this point, this brings into question if there will be another Xbox or if this is the end of the line. There is a long and sordid history of Microsoft rapidly losing interest in products that are not quickly adopted. If they don't start to get behind their products, support them, and LISTEN to feedback of the consumer rather than just walk away under criticism, then they'll be fated forever to survive off of the monopoly they have on office software. It is obvious that MS is after that iPad / iPhone / Playstation 2 level of success with their respective products but without confidence from within and some flexibility this is never going to happen, and each item they scrap will only push them further from it, alienatoing those precious few who are willing to buy in early.

How exactly were MSN messenger, Pocket PC, WMC and even Clippy, failures? As for the bolded, Microsoft isn't doing anything, a couple of random investors are (trying to). Also, how can you say "but still having the stones to pursue and support it. They didn't crumble under feedback and cut it because it wasn't profitable" when in this very thread we've seen how many billions they've invested in Bing? Anyway, you're overreacting to something that isn't really news, and saying things that just aren't true in the process.

 

[Corto]

I can see it happen. The mythic living room battle is irrelevant right now. I can see Microsoft reinventing the division to a Windows Games cloud based service and license it to cable boxes/ISPs, tv companies, etc.

 

[The Abominable Snowman]

Xbox brand is having no growth and has no chance of succeeding. Not listening to feedback is only part of the problem, it's like they actively did the opposite of what even an idiot expected them to do with xbox one, so I don't think anyone feels sorry for them if they abandon the console endeavor.

Even a forum dweller could make better decisions with the xbox one direction than they did. The damage control despite that was hilarious too.

I think something is lost here. What exactly did forum dwellers want with the Xbox One? What is so drastically different about the Xbox one aside the $100 higher price tag?

 

[Arc]

The Xbox strategy doesn't even make sense anymore. Spend a bunch of money every 5-6 years in the hopes of making it back over a generation, to do what? Stymie Sony?

This x100000000

Lets not forget that the original Xbox existed simply because Sony announced the PS2 would eventually be able to connect to the internet, and Microsoft was scared of the living room space of the future being owned by Sony. Now the fight over the living room seems irrelevant.

 

[Neoxon]

If Xbox were to be killed off, I'm pretty sure either Steam, Amazon, or Samsung would join the Big 3 to challenge Sony & Nintendo.

If nobody does come forward, Nintendo would have to step up their game since, as someone else here said, most of the Xbox consumers would gravitate towards Sony.

On the possible idea of Nintendo buying Microsoft, they technically could (assuming MS doesn't ask for an insane price), but I doubt they will. Though I wouldn't put it past Amazon or Samsung to buy the Xbox division.

 

[aeolist]

the arguments for keeping the consumer side of microsoft are the same ones IBM faced when they considered selling off their consumer products and they made the right call by focusing on the enterprise. staying in mature markets with heavy competition that's vastly outpacing you, low margins, fickle customers who are very difficult to tie into your product long-term, and a low probability of achieving success isn't a good idea.

and in my opinion just about every effect microsoft has had in the last decade to both the console and PC gaming space has been negative so i really hope they cut and run.

 

[DrkSage]

I wouldn't mind an era where it's just PC, Sony and Nintendo. Everyone can own all 3 or just playstation/PC, Nintendo/PC or Nintendo/playstation, that way fanboy/console wars will be put to rest.

What I don't understand is why kill the Xbox division when killing just bing can turn the table around. Seriously kill bing that's it, just kill bing and you'll stop throwing away billions.

 

[CHC]

Messenger was HUGE over here.

Also would argue that almost have of that list isn't a failure.

Most of the list is, in the eyes of MS, failed. Almost none of those products are supported today because they failed to be flexible, it has nothing to do with hardware or how much they sold. The point is not if they did well at first, the point is that MS has a habit of not supporting its products. Messenger may have BEEN huge but does anyone still use it today? Meanwhile I still game on Playstation (brand from 1994) and listen to music on my iPhone (evolution of iPod, from 2001). Those are products that change with the times, and allow the early adopters to be rewarded. My music library from my first iPod still plays today, I can still buy and play PS1 on my PS3 or Vita, but my friend list from MSN would be a useless block of text today, as will anything I did using GFWL.

 

[boingball]

It depends where MS sees their future. Do they want to do both devices and services? Do both consumer and enterprise? Since Apple is hugely successful doing both I think MS is not yet ready to give up on this vision. Devices/consumer is the area MS identified for its growth potential. On the other hand 90% or so of MS profits come from enterprise/services.

Bing is a key component for MS, so I don't think it is in any danger. Pushing Google on Windows phones is not something I see MS doing. Unless they go all out Office/Cloud only and kill of all of consumer/devices then Bing will not be killed.

Surface is a potential candidate, depending on where the tablet market is going. But since it seems that enterprise penetration just has begun and there might be quite some potential there I don't think MS will give up this division easily. Unless they offer their office/enterprise solutions also on other platforms. Or 3rd parties become successful. But MS just bought into phones, relying on 3rd parties outside of the PC/server business is not the current MS strategy.

The Xbox division is the odd man out. Obviously MS sees a huge potential here (with their 1 billion console market goal), but in my opinion consoles are a niche product. In a decade gaming will be all on mobile phones (which you can connect to TVs to have a bigger screen) or streaming directly to your TV or a USB stick connected to your TV. There still will be consoles, but similar to DSLRs/mobile phone cameras, that will be a small market with only specialized companies (I could see Nintendo still in that market but not MS). If the Xbox One starts to struggle I could see MS re-evaluating their position (one might argue that it is already struggling, but the current numbers are far from bad).


With a new boss in all of this is obviously speculation, since as a new boss there could be very well be some huge strategic changes in MS direction. On the other hand both Gates and Ballmer are still with the company which makes this doubtful.

 

[Kurtofan]

Apple ? Google? Samsung? Walmart?

OUYA minous music:

 

[babyghost853]

investors, idiots with no vision except for the immediate bottom line

Every time I read a post like this I have to laugh at how clueless some people are, for the record I want to see the Xbox One fail miserably that Microsoft heads will have nightmares the second anyone mentions drm.

 

[CCIE]

As a MS stockholder... I would love for them to get rid of Xbox, Surface, and Bing. As a gamer, I'd love to see MS out of gaming. Someone else will step up, because they always do. But the XB1 is a vision of everything wrong at MS - it's an average piece of hardware with a big camera for "voice control". And it is the most expensive machine

Never mind the cable companies are doing the same thing at a much more cost effective price point.

 

[SmokedMeat]

That's a pretty loaded title with only marginal support for getting rid of the gaming division in the article. Bing and Surface make sense as - once again - MS late entry into a crowded field has flopped. The gaming division - without any financial information not mired in rumor - seems healthy when not shuffled into MS's other losing non-windows ventures.

From my understanding Microsoft is using Android patent royalties to cover up Xbox division losses.

Not surprised given they're blowing money on timed exclusive deals, a massive NFL deal, and of course R&D costs for Xbone.

 

[LeleSocho]

Didn't all the original rare people leave? Not the same studio as the n64 days...

i said IPs

 

[Arc]

This thread needs to stop crying about "short sighted investors". The Xbox division has been unprofitable for 13 years now and is in a shrinking market. How is that short sighted even a little bit?

 

[Famassu]

investors, idiots with no vision except for the immediate bottom line

Immediate? They've mostly been losing money with Xbox year after year even before Xbox launched and now Xbone seem to be losing to PS4 in a big way and pretty much every way they could perhaps change that would mean losing even more money. They've been trying to make Xbox successful for over 10 years now and it doesn't seem to be happening. Whatever money they started to make with Xbox 360 isn't enough to negate the losses they took for the R&D, initial investment and marketing blitz of the first Xbox, the R&D and other stuff with Xbox 360 (RROD and the followed extended period of warranties, lots of more or less pointless moneyhatting for exclusive shit etc.) and now Xbone's R&D, among other things.

 

[RibMan]

Why kill Xbox? Is it really not profitable at all?

Bing and Surface I can understand (well not Surface Pro, that thing is great)

Compared to Office, Xbox is useless to the company. Xbox Live subscriptions and the Halo IP have value, so if things really went south, I imagine both would continue to exist somehow.

To the best of my knowledge, Nadella hasn't expressed interest in getting rid of Xbox. It was Elop who was 'considering' selling off the Xbox brand if he was elected CEO.

 

[SmokedMeat]

Every time I read a post like this I have to laugh at how clueless some people are, for the record I want to see the Xbox One fail miserably that Microsoft heads will have nightmares the second anyone mentions drm.

I'd love to see Microsoft out of the console market. I despise everything they stand for, and try and implement in this hobby. Thanks to them we have an online paywall, and now half finished games with IAPs.
Someone else would step in. Hell, we now have Amazon throwing their hat in the arena.

 

[digoutyoursoul]

I wouldn't mind an era where it's just PC, Sony and Nintendo. Everyone can own all 3 or just playstation/PC, Nintendo/PC or Nintendo/playstation, that way fanboy/console wars will be put to rest.

What I don't understand is why kill the Xbox division when killing just bing can turn the table around. Seriously kill bing that's it, just kill bing and you'll stop throwing away billions.

Was you around during the SNES/Genesis days? There will be always be childish console wars with competitors, the internet has just given it a bigger voice.

 

[oxidax]

But.. Will it really happen? or that's just an investors dream ?

 

[jcm]

holy shit @ bing.

no idea it was doing that badly.

They have now obfuscated the earnings reporting, so we can't get a good breakout of the online losses, but here they are up through September 2013. It's pretty amazing that MS has been able to be so profitable while they have a division doing this. It really puts the Windows/Office profits into perspective.

The total is $12.36B since March 2006, not including the $6.2B writedown for aQuantive.

 

[Azih]

Considering Apple and Google are Microsoft's competitors everywhere and how both of them are using their consumer facing strength to move into enterprise (google doc, iPhone BYOD) it would be an incredibly short sighted move for MS to give up on consumers as these investors want.

 

[Krakn3Dfx]

Personally I would like xbox to be killed off. Hopefully it would lead to another company stepping up to the big three.

I dunno, not a fan of the XBox brand anymore, but I think it does a lot to keep Sony in check, especially after this last generation. Nintendo clearly isn't going to break any records in the home console market this generation, better to have 2 established companies in the fray.

I wouldn't want to see either of the Big 3 leave the market right now without a strong competitor waiting in the wings with an announced product that would slide into that spot.

 

[Corto]

the arguments for keeping the consumer side of microsoft are the same ones IBM faced when they considered selling off their consumer products and they made the right call by focusing on the enterprise. staying in mature markets with heavy competition that's vastly outpacing you, low margins, fickle customers who are very difficult to tie into your product long-term, and a low probability of achieving success isn't a good idea.

and in my opinion just about every effect microsoft has had in the last decade to both the console and PC gaming space has been negative so i really hope they cut and run.

Exactly. Though Microsoft is not in such a dire position as IBM in 2005, they look at IBM resurgence after 2005 and must wonder if that is indeed what they should focus on.

 

[Wolfgunblood Garopa]

the arguments for keeping the consumer side of microsoft are the same ones IBM faced when they considered selling off their consumer products and they made the right call by focusing on the enterprise. staying in mature markets with heavy competition that's vastly outpacing you, low margins, fickle customers who are very difficult to tie into your product long-term, and a low probability of achieving success isn't a good idea.

and in my opinion just about every effect microsoft has had in the last decade to both the console and PC gaming space has been negative so i really hope they cut and run.

While Sony was pushing hi def movie discs, MS was pushing the standard of console online multiplayer. Sony is still behind in that department, regardless of MS's missteps in other areas.

Online mulitplayer is the most popular and significant 'culture' in modern gaming, and MS was a big part of it. They still are the most trusted network for online mulitplayer.

 

[Banjo-Kazooie]

Xbox would be the LAST to go between their consumer focused products. Things like Bing, Surface, and Windows Phone would be ideal candidates to wipe themselves clean of before Xbox.

Listen, it isn't happening anytime soon. They are going all in on the Xbox Brand... Xbox Music, Xbox Fitness, Xbox Video, Xbox Reading, ect. They want in the living room.

They just bought Nokia for their WP, and WP is in worse condition than Xbox...

Surface 2 has faced shortages due to demand and is being met with positive reviews.

These aren't going anywhere anytime soon, with the exception of maybe Bing.

 

[BlackJace]

What the hell is Bing still doing being alive, holy hell at that 2012 loss.

 

[VicDaMoan03]

Its amazing all three Microsoft, Sony, and Nintendo have their own troubles and issues.

Nintendo- Wii U has been a failure and has already been outsold by PS4 and Xbone. Brand as a whole is unprofitable right now because they depend solely on gaming.

Microsoft- Inception to date Xbox division has lost a lot of money. While they are profitable right now Xbox isn't their main focus or money maker. Xbox requires a big investment every 5-6 years and Xbox doesn't fit their other main focus product lines. Does it make sense to sell Xbox and focus their resources on their other main product lines which dwarf Xbox?

Sony- PlayStation 4 is doing very well but the company as a whole is not looking so good. It's not unheard of to think Sony's broader problems could negatively affect the PlayStation brand at some point in time.

 

[Biker19]

Why kill Xbox? Is it really not profitable at all?

Um, there was about a $4.2 Billion loss from the Original Xbox, more losses with Xbox 360 from launch to about mid-2008 (along with the $1 Billion loss thanks to the RROD scandal) & about $3 Billion being spent on Xbox One.

The best year that the Xbox brand was profitable in was back in 2011 with about $1.2 Billion.

The Xbox strategy doesn't even make sense anymore. Spend a bunch of money every 5-6 years in the hopes of making it back over a generation, to do what? Stymie Sony?

And so far, it's failing to do so.

 

[digoutyoursoul]

OUYA minous music:

Oh Jesus

 

[Azih]

IBM's core business was never Operating Systems or Office Suites though unlike Microsoft whose core is being threatened by Android, iOS, and Google Docs all of which are using beachheads in the consumer market to invade the enterprise.

 

[Osiris]

You know, it's kind of amusing that in their blinkered approach to "winning the living room" by concentrating too much on consoles both Sony and Microsoft ended up losing that war to smartphones and tablets.

But at least we've got some kick-ass consoles out of the fray.

What happens when they both realize that the war is over/lost is going to be interesting, that's for sure. Either console gaming stands alone as a worthwhile endeavor financially for both or it doesn't.

IBM's core business was never Operating Systems or Office Suites though unlike Microsoft whose core is being threatened by Android, iOS, and Google Docs all of which are using beachheads in the consumer market to invade the enterprise.

Oh man, you don't want to know how many times I heard the term "Big Iron" whilst working at IBM Greenford

 

[aeolist]

While Sony was pushing hi def movie discs, MS was pushing the standard of console online multiplayer. Sony is still behind in that department, regardless of MS's missteps in other areas.

Online mulitplayer is the most popular and significant 'culture' in modern gaming, and MS was a big part of it. They still are the most trusted network for online mulitplayer.

the standard for console online multiplayer being paywalled peer-to-peer connections? i think we could have done without

 

[Cheech]

War in the living room is lost? I'm sure MS' aim is just to sell as many or a bit more Xbox Ones per year than they did Xbox 360s. They're not doing too bad.

This is not going to happen. It might, eventually, but not for a couple years. Microsoft's board does not want to hear that shit. The reason the XBox division still exists was "give it a couple years" since 2001. Given the Xbox One's stumbles, it's going to take this year to right the ship. If they don't blow the doors off with a Titanfall - Kinect = $350 bundle this fall, Xbox is catching a bullet.

Their aim is just to grab some foothold in the market, make their niche profitable, and make a name for themselves. Same as with Windows Phone. They'd be happy with a 10% marketshare.

In the history of the company, they have never been happy with such a tiny marketshare. They straight up kill products that perform that poorly. They don't play around with niche size slices of anything.

Windows Mobile will probably meet the same fate as Surface, whatever that is. Nobody is buying the damn things, so the future isn't bright there either. The grand vision of Windows 8/Metro driving PCs, tablets, phones, and Xbox is a complete failure, that the company has not internally processed yet.

Your advice makes no sense.

I have worked with Microsoft for years. I'm acutely aware of how that company works. I guarantee they are either going to vaporize all these consumer product lines like Xbox, or throw even more R&D dollars at them at the expense of their core product lines.

Which, again, is not going to happen due to things the board have said. The board wants them to continue to print grotesque amounts of money in business software and services, and ignore everything else, as it's a (R&D) distraction.

 

[Omega]

investors, idiots with no vision except for the immediate bottom line

it's been an unprofitable venture for 13 years. How much more do you want them to wait?

 

[cpp_is_king]

We need someone to update the "What will save the Wii U" GIF with an entry that says "Killing Xbox"

 

[Gorillaz]

While Sony was pushing hi def movie discs, MS was pushing the standard of console online multiplayer. Sony is still behind in that department, regardless of MS's missteps in other areas.

Online mulitplayer is the most popular and significant 'culture' in modern gaming, and MS was a big part of it. They still are the most trusted network for online mulitplayer.

I've been saying this as well. MS has made MP on consoles big today. I can't see Sony picking up the ball like that in any way right now.

 

[SummitAve]

I'd love to see Microsoft out of the console market. I despise everything they stand for, and try and implement in this hobby. Thanks to them we have an online paywall, and now half finished games with IAPs.
Someone else would step in. Hell, we now have Amazon throwing their hat in the arena.

Really? You'd want a amjor competitior to drop out and all those people to lose thier jobs because they aren't supposedly upholding the sanctity of gaming that's been long since tarnished.

 

[Corto]

it's been an unprofitable venture for 13 years. How much more do you want them to wait?

Just until Halo 14 comes out.

 

[Bsigg12]

it's been an unprofitable venture for 13 years. How much more do you want them to wait?

It's been profitbale for 3-4 years now, given it won't bring in the hundreds of millions of dollars some of their other things do. It's reported with Surface and Windows Phone though in the entertainment/hardware division and that division isn't profitable.

 

[gcubed]

Is there still even a war for the living room? The war for the living room is being fought by apple, amazon and Netflix. This mythical war that a console can decide is antiquated thinking.

MS and Sony both lost that war when any TV offers what most people want built in. MS is still trying to fight for a mythical thing, at least Sony adapted and realized it's over and focused back on gaming.

 

[justsomeguy]

Everyone I know uses Google as default.

Know anyone with an iPhone? Guess what...

 

[Phamit]

Isnt this the same story that appears every two month, telling that the same two investors from 2 month ago still want that Microsoft transform to Enterprise only ?

 

[adamantypants]

Even if the Xbox division isn't profitable, I'd have to expect it's doing wonders for Microsoft mindshare. Windows 8 isn't exactly a fan favorite, neither are the Surface tablets, Windows Phone, or pretty much anything else they're putting out.

Xbox is the only thing people actually care about and like that Microsoft makes.

 

[blizzardjesus]

This x100000000

Lets not forget that the original Xbox existed simply because Sony announced the PS2 would eventually be able to connect to the internet, and Microsoft was scared of the living room space of the future being owned by Sony. Now the fight over the living room seems irrelevant.

Do you have a source for that?

 

[EGM1966]

Just being logical it is possible to see this playing out although i have my doubts MS is that ready to give up on the huge consumer market.

Bing is a loss making enterprise dependant on MS paying to have it used or sticking it everywhere they can (like Xbox) and arguably fighting Google for search results is the last place MS needs to be spending money/losing money right now. Not only that but the chances of it making any dent in Google - competitively and strategically it just seems like a Folly.

XBox is making money but returns are minimal next to the big powerhouse divisions and with the reception given to the XB1 reveal and the strong favour shown for PS4 I think there is a real possibility that the first year or two of this gen is going to shown MS that they're now chasing a vanished price (single MS dominant console in every living room pushing MS OS and services). MS I believe will have no desire to purely push Xbox as a game console only and if the reaction to XB1 shows that all the market wants is a game console that might provide other services then the whole strategy will be called into question.

Surface seems like it's arrived too late and is failing like most MS hardware (with the arguable exception of Xbox) to provide a decent platform to push MS OS and services.

To be blunt, it's not hard to see the wisdom in sinking lots of money/effort into the OS side and using deals (rather than their own hardware) to get their OS on other devices which I believe will be their focus - not having their own tablet but getting their OS on Samsung, Asus and other tablets.

In short MS got a huge case of Apple evny but simply didn't control the more open PC market nearly enough to make it their own closed environment to rival Apple. Xbox has made some dents as a home console doubling for media but isn't really seeming to drag much else with it and Surface has failed miserably. In the meantime Google has snapped up the open market with other hardware vendors with Android while MS spent billions competing with Google's dominant search engine.

Not hard to see that the entire MS effort in consumer circles looks pretty iffy, and it contains the huge miss of the tablet/mobile market and the humiliation of being a minor player from an OS perspective.

While like most I see positive and negative to MS efforts around gaming the fact remains it is a fairly low return tangent in a strategy that overall has failed miserably and left MS spending a fortune chasing crumbs in key markets it failed to see developing.

A lot will depending on just how much traction XB1 gets in the media side I think, and how well the division can argue it's making progress. If most people are gaming on XB1 then ironically that argues the platform is not serving its purpose - and seeing the PS4 (currently a pure game console by comparison) seeing much higher demand can't help either as that argues the main market for these devices is games.

Of course being small (in proportion) it may be a long time yet before the new CEO and MS board even get around to worrying about Xbox. It makes money so they may simply decide they have bigger fish to fry right now and let it continue uninterrupted.