Bill Gates would support Microsoft selling off its Xbox business

[Shawn Knight]

The debate of whether or not Microsoft should sell off its Bing and Xbox businesses has been going on for years. Regardless, the Redmond-based company has continued to invest in both ventures but with new CEO Satya Nadella at the helm, is now the right time to jettison the loss-making Xbox division?

Microsoft co-founder, former CEO and newly appointed technical advisor Bill Gates weighed in on the matter during a recent interview. While not coming out directly in support of or against the sale of either, Gates suggested selling off the Xbox division isn’t as obvious as one might think because they plan to have an overall gaming strategy.

Even still, he added that he was sure Nadella and the team would look at the possibility and that it would ultimately be up to them. If they did decide to sell it, Gates said he would “absolutely” support the decision.

Shortly after, Microsoft’s communications chief Frank Shaw reiterated via Twitter that Gates’ comments about Xbox reflected support of Satya as CEO. Or in other words, he didn’t specifically say he supported selling the Xbox division.

Gates’ comments come not long after rumors surfaced that former Nokia CEO and Microsoft CEO candidate Stephen Elop would have pushed for selling off the two divisions if he had won the top job. That didn’t pan out, of course, but with Elop now leading the company’s hardware business, he could still push the idea.

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https://www.techspot.com/news/56668-bill-gates-would-support-microsoft-selling-off-its-xbox-business.html

 

[Jad Chaar]

I dont understand why they would sell one of the most profitable sectors...

 

[Footlong]

I dont understand why they would sell one of the most profitable sectors...

Because it's not one of the most profitable sectors. According to Microsoft the most profitable sector is in Office 365 and cloud services. Xbox has barely break even and "bing" is a colossal fail. I get why they would sell Xbox division. After they flunked Xbox One it's better to sell this ship before it sinks and drags Microsoft market value with it.

 

[Guest]

Even if they are not super successful, they should keep them both, makes the Microsoft brand bigger

 

[davislane1]

Even if they are not super successful, they should keep them both, makes the Microsoft brand bigger

Bigger brand, smaller profits is no way to run a company.

 

[cliffordcooley]

and "bing" is a colossal fail.

No it is not! If you don't like Bing, say that you don't like Bing but stop saying it doesn't work.

 

[spectrenad]

Even if they are not super successful, they should keep them both, makes the Microsoft brand bigger

Bigger brand, smaller profits is no way to run a company.

Diversity is, especially nowadays. The market evolve so quickly, having a foot in every possible door is not a bad thing. With the all-in-one trend, our cellphones may soon replace every device we own, even a video game console. And when that day comes, you'll want the expertise in that field. And all the patents that come with it.

 

[spectrenad]

No it is not! If you don't like Bing, say that you don't like Bing but stop saying it doesn't work.

I use Bing sometimes, and I gotta say, it looks way better than Google. The latter still is a little more accurate thou :/

 

[GhostRyder]

Because it's not one of the most profitable sectors. According to Microsoft the most profitable sector is in Office 365 and cloud services. Xbox has barely break even and "bing" is a colossal fail. I get why they would sell Xbox division. After they flunked Xbox One it's better to sell this ship before it sinks and drags Microsoft market value with it.

No its not, its selling better per region than the PS4 and right now has more games including one of the top selling next gen games.

Bing also works fine, just a different list of results. Google still is my go to guy for a search engine but I would not say bing is a failure. Its also only like 7 months into the release and both consoles are selling significantly better than any console has done in the past at release.

 

[captaincranky]

I think you people are missing one important point. If M$ went belly up tomorrow, Bil Gates would still have enough money to last, at bare minimum, 10 lifetimes.

So that means, he can afford to screw around with the internal workings of the company, with no jeopardy whatsoever.

In effect, he gets to play Dr. Frankenstein with the business. Capriciously cutting off a limb here, sewing it back on over there. perhaps even selling one of its organs on the black market.

 

[Skidmarksdeluxe]

I dont understand why they would sell one of the most profitable sectors...

Because it's probably not the big money spinner you think it is. It's also a distraction. It makes sense to me to dump it.
They're a software company and that's where they should focus all their attention.

 

[Guest]

Because it's probably not the big money spinner you think it is. It's also a distraction. It makes sense to me to dump it.
They're a software company and that's where they should focus all their attention.

So then what do you make of the Nokia purchase then? Or, for that matter the fact along with the one Microsoft strategy, they are now claiming to be a DEVICES and services company? Last time I checked, the Xbox is a device and has many Microsoft services it taps into.

No it is not! If you don't like Bing, say that you don't like Bing but stop saying it doesn't work.

Fully agree with you!!

I use Bing sometimes, and I gotta say, it looks way better than Google. The latter still is a little more accurate thou :/

I used to use Google for everything. Then I kind of got tired of them and their damn adverts and trying to shove some or other new service they have down my throat, infested with adverts of course. So I took the plunge to Microsoft's Bing. At first it was a bit jarring, as I was so used to how Google operated and there was a time I was back and forth between the two, but these days I hardly ever load up Google or any of its services. I think I've gotten to the point where I can finally shut down my Gmail account forever in favour of my outlook account. Lets just face it, Microsoft does email better anyways. I do however have to admit that on the odd occasion I do have to fire up the Google search engine when I don't get the right results, but I have often compared the result sets of the two and I would say they are usually 95% the same, with Bing even ousting Google occasionally. It is most definitely getting better with time and now that Microsoft also has Office online for free, there is virtually no reason in my opinion to use any of Googles watered down versions.

 

[Guest]

No its not, its selling better per region than the PS4 and right now has more games including one of the top selling next gen games.
Bing also works fine, just a different list of results. Google still is my go to guy for a search engine but I would not say bing is a failure. Its also only like 7 months into the release and both consoles are selling significantly better than any console has done in the past at release.

The Xbox One is NOT selling better than the PS4. In fact, recent reports claim the PS4 has sold about 7 million units to end users, while Microsoft says Xbox One shipments (not sales) were just 5 million. And unlike you, I do have sources:
http://www.dailyfinance.com/2014/04/23/ps4-versus-xbox-winner/
http://bgr.com/2014/04/28/ps4-vs-xbox-one-price-drop-sony/
http://wallstcheatsheet.com/technology/xbox-one-vs-ps4-sony-wins-on-all-fronts-in-march.html/
And all your points are completely moot. This is not about whether products are good, whether they "have more games", or whether "it's just as good as Google". It's about profits, and those are not profitable. Although Bing, despite not being very profitable (yet), is a cornerstone for various Microsoft services and is unlikely to be sold, consoles is a market where it's famously difficult to break even to begin with, and only presents profits after a few years. And as you can see in the link below, the Xbox 360 was not a good endeavor for Microsoft during it's entire life cycle (accumulating losses of $3 billion by 2012), and even when it did generate gains (1.3 billion on the best case) it was a tiny fraction of the profits from Windows, Office and cloud services.
So Footlong's point is spot on. The Xbox division is not well profitable, and now with the raise of popularity on smartphones and tablet for casual gaming and consoles taking a further hit, it makes complete sense for Microsoft to consider selling Xbox altogether.

 

[VitalyT]

For the Nokia's ex-CEO to become Microsoft CEO, I'd call it the joke of the decade. Buying a company that nearly went bankrupt because of poor board decisions just to make the top culprit the CEO of the company who bought them out - that is as stupid as it gets.

Surely he would push off a few departments for sale, along with him mom, 'cos evidently he's a genius.

 

[RenGood08]

Hmmm...interesting. Selling off Xbox. I was about to ask if that meant they were going to stop making them. BUT selling them off just means transferring the technology to another company...so no they will keep making them. Hopefully sell it off to someone who can make the technology in this system better and maybe as good as the PlayStations. But I really dunno. I've always been partial to Xbox...but I am primarily and firstly a PC gamer.

 

[davislane1]

Diversity is, especially nowadays. The market evolve so quickly, having a foot in every possible door is not a bad thing. With the all-in-one trend, our cellphones may soon replace every device we own, even a video game console. And when that day comes, you'll want the expertise in that field. And all the patents that come with it.

Having a diversified product portfolio ("big brand") isn't about having a foot in every possible door or attaining core competencies. It's about risk reduction. The more diversified the portfolio the better able a company is able to absorb losses and cut underperforming divisions.

If Xbox is a losing proposition and Bing is underperforming, they have little reason not to sell off the brands and retain certain royalties. It offloads the time and resources needed to make those products successful onto someone else and enables Microsoft to shift its attention to other core products. If they suddenly need expertise and capabilities they don't posses in the future, they can simply buyout firms that have what they need. That's how it works on paper, at least.

 

[theBest11778]

Hmmm...interesting. Selling off Xbox. I was about to ask if that meant they were going to stop making them. BUT selling them off just means transferring the technology to another company...so no they will keep making them. Hopefully sell it off to someone who can make the technology in this system better and maybe as good as the PlayStations. But I really dunno. I've always been partial to Xbox...but I am primarily and firstly a PC gamer.

Xbox usually appeals more to PC gamers. Considering the original Xbox was a Pentium 3/Celeron PC with an Nvidia GPU at it's core the games originally supported were mostly high profile PC titles anyway. Halo was originally supposed to be a PC exclusive (Kind of wish it was.)

Anyway, selling off their Xbox division would be a major shift in the company's future. With them developing original content (New TV series, their game dev devisions,) they'd have to sell it all. Of course they could refocus on supporting PC gaming, and delivering content that way. With many new things in the pipeline for MS it wouldn't make sense to sell it off now without seeing how things pan out. The other question is who has the money to buy all of that? Walmart? Google? Apple? I don't think any of them would want to take over the Xbox mantle. If they want out of the gaming market the smart play would be free their game developers from their contracts (allow them to keep their branding and go independent,) clear out your current pipeline of content, and this console generation, then sell off the brand a few years before the PS5 surfaces so whomever buys it has time to keep running with it.

 

[gingerbill]

I refuse to believe xbox is making a loss overall . Over 100 million xbox 360's sold and a silly amount of games sold . They are saying xbox 360 lost money overall in its lifespan? I don't believe that. That sounds like picking the figures you want to suit your argument.

 

[RenGood08]

Xbox usually appeals more to PC gamers. Considering the original Xbox was a Pentium 3/Celeron PC with an Nvidia GPU at it's core the games originally supported were mostly high profile PC titles anyway. Halo was originally supposed to be a PC exclusive (Kind of wish it was.)

Anyway, selling off their Xbox division would be a major shift in the company's future. With them developing original content (New TV series, their game dev devisions,) they'd have to sell it all. Of course they could refocus on supporting PC gaming, and delivering content that way. With many new things in the pipeline for MS it wouldn't make sense to sell it off now without seeing how things pan out. The other question is who has the money to buy all of that? Walmart? Google? Apple? I don't think any of them would want to take over the Xbox mantle. If they want out of the gaming market the smart play would be free their game developers from their contracts (allow them to keep their branding and go independent,) clear out your current pipeline of content, and this console generation, then sell off the brand a few years before the PS5 surfaces so whomever buys it has time to keep running with it.

To be honest, I think the only company that would be near buying it would be Google. They are trying to dip their hands into ever aspect in the market. If they take over the Xbox industry, they will truly need to do something extraordinary with the system for people feeling they need to buy it...like having the oculus rift as a primary way on gaming instead of the joysticks. Walmart wouldn't buy it and Apple wouldn't buy it.

And my only reason for not wanting a system is because I don't feel I have the control in the game like I do on a PC. Though I do prefer Xbox over PlayStation, I prefer PC over all lol. Its all about control. If I play CoD on xbox, I'm shooting every which way and I can't seem to keep control. If I play it on my PC I have much better control.

 

[Guest]

"Over 100 million xbox 360's sold....."
...............................................................................
Uhhmm... , Almost 50 million or more of that figure went into replacement. So Bill is right... supporting a sale of the division.

 

[davislane1]

I refuse to believe xbox is making a loss overall . Over 100 million xbox 360's sold and a silly amount of games sold . They are saying xbox 360 lost money overall in its lifespan? I don't believe that. That sounds like picking the figures you want to suit your argument.

I've expanded that equation for you:

(100+ million units sold) + ("silly" amount of games sold) - (cost of producing each unit) - (royalties on each game sold) - (cost of strategic partnerships) - (cost of previous and on-going R&D) - (cost of Xbox LIVE infrastructure and staff) - (royalties on Xbox LIVE content) - (cost of marketing) - (cost of sales) - (taxes on gross income)

 

[wastedkill]

Selling off the bing & xbox division would be the best thing for microsoft, they are loosing tons of cash thanks to bing and quite a bit from their xbox divison, So ye obviously bill is going to say remove it after all its loosing lots of money that could be put to good use!

 

[Guest]

I would buy it. Will he accept BitCoin?

 

[trparky]

One of the major things that I think has killed the XBOX One is that it tried to be everything to everyone. Play movies, music, apps, surf the web, apps, play games. Note how I put “play games” last in the list, that wasn’t a mistake; it really was the last thing that Microsoft made the XBOX One capable of doing. The hardware inside the device is proof of that since the device can’t even play the games that are coming out decently. When you watch a high end game play at 1080p on the Playstation 4 yet the XBOX One’s rendition of the game only plays at 720p at half the frame rate, you have a big problem.

What Microsoft tried to do with the XBOX One was to make a set-top box, a living room entertainment machine if you will. Why? They wanted to go after the parts of the market that Google and Apple were going after. And just why did Microsoft want to do this? Well, we have only one person to blame for this… Steve “I want to f**king kill Google” Ballmer. If you want someone to blame for the XBOX One’s complete failure, you have no one else to look at but Steve Ballmer. He needs to be shown the door at Microsoft and told to go pound sand.

 

[S_Brideau]

I dont understand why they would sell one of the most profitable sectors...

Because it's not one of the most profitable sectors. According to Microsoft the most profitable sector is in Office 365 and cloud services. Xbox has barely break even and "bing" is a colossal fail. I get why they would sell Xbox division. After they flunked Xbox One it's better to sell this ship before it sinks and drags Microsoft market value with it.

It's currently too early to tell if Xbox One failed. The 360 started the same way and ended up giving Microsoft a good profit.