MS Investors want MS to sell Xbox division because It hasn't made money yet

http://www.eteknix.com/microsoft-investor-wants-to-fire-ballmer-and-sell-xbox-division/

ouch!! after a decade Xbox still hasnt' made any profit

http://www.eteknix.com/microsoft-investor-wants-to-fire-ballmer-and-sell-xbox-division/

ouch!! after a decade Xbox still hasnt' made any profit

-Damien-

Seems there is only ONE investor screaming abot this (ValueAct). They only own 1% stake in M$. I don't see this as a big deal. A similar thing like this happened with Sony as well. One of their investors wanted Sony to split their divisions. What did Sony do. They said NO!! That's pretty much what Microsoft will say to this investor. Stuff like this happens all the time. Not a big deal.

Well, MS is a lot better at managing their ERP systems and OS'.

[QUOTE="-Damien-"]

http://www.eteknix.com/microsoft-investor-wants-to-fire-ballmer-and-sell-xbox-division/

ouch!! after a decade Xbox still hasnt' made any profit

blackace

Seems there is only ONE investor screaming abot this (ValueAct). They only own 1% stake in M$. I don't see this as a big deal. A similar thing like this happened with Sony as well. One of their investors wanted Sony to split their divisions. What did Sony do. They said NO!! That's pretty much what Microsoft will say to this investor. Stuff like this happens all the time. Not a big deal.

[QUOTE="-Damien-"]

http://www.eteknix.com/microsoft-investor-wants-to-fire-ballmer-and-sell-xbox-division/

ouch!! after a decade Xbox still hasnt' made any profit

blackace

Seems there is only ONE investor screaming abot this (ValueAct). They only own 1% stake in M$. I don't see this as a big deal. A similar thing like this happened with Sony as well. One of their investors wanted Sony to split their divisions. What did Sony do. They said NO!! That's pretty much what Microsoft will say to this investor. Stuff like this happens all the time. Not a big deal.

They invested $2 Billion into Microsoft and get to see all the real numbers about the poor financial health of the XBox division. You know better than they do?

ouch!! after a decade Xbox still hasnt' made any profit

-Damien-

Yet still, MS keeps focusing on Xbox instead of their PC division, which has made a lot of profit.

This news surprises me though, as I thought Xbox Live would've brought in loads of money. :?

[QUOTE="blackace"]

[QUOTE="-Damien-"]

http://www.eteknix.com/microsoft-investor-wants-to-fire-ballmer-and-sell-xbox-division/

ouch!! after a decade Xbox still hasnt' made any profit

arredondo

Seems there is only ONE investor screaming abot this (ValueAct). They only own 1% stake in M$. I don't see this as a big deal. A similar thing like this happened with Sony as well. One of their investors wanted Sony to split their divisions. What did Sony do. They said NO!! That's pretty much what Microsoft will say to this investor. Stuff like this happens all the time. Not a big deal.

They invested $2 Billion into Microsoft and get to see all the real numbers about the poor financial health of the XBox division. You know better than they do?

The Xbox has been the best selling console for the past ~30 months in the largest market in the world - it is very easy to spin numbers however you want.

And they own 1%?

Good luck with that......

LOL MS makes loads of money off Xbox. Not sure what that artcle is about but it's bogus.

There are a lot of people that think the console market is not worth it anymore, too much expenses for little to no gain. Both Sony and MS this gen didn't really kill it with profits, especially compared to the other divisions. Taking in consideration phones, tablets and laptops becoming more and more mainstream and powerful plus they see the new console of Nintendo performing horribly as a bad sign. Sure the pre orders for PS4 right now are pretty good but those that usually pre order are the most avid fanboys and hardcore gamers. After 5 or so million consoles are sold will it keep selling like that, will the casual market support them?

That is to be expected, there is some doubt. However is too late now for MS to even consider it. They already spend the money on R&D and preparing the new console. Would be foolish to give it to someone else without giving a try tnext gen too and see how it goes. 

Plus the living room market is still an untapped gold mine although have fun owning that market with a $500 box.

thread title says "investors" while article says "investor".

The numbers don't lie. Overall the Gaming Division at Microsoft has been sucking the company dry. Note the bar on the far right:

So they think they're gonna try to take out the IEB division? shadowchronicle

The what? There are simply too many abbreviations for a foreigner to take in ;)

The numbers don't lie. Overall the Gaming Division at Microsoft has been sucking the company dry. Note the bar on the far right:

 

arredondo

And as I stated before, in this thread...to you! that numbers can always be easily twisted. I see that as five consecutive years of profit.

ouch!! after a decade Xbox still hasnt' made any profit

-Damien-

It's just money hungry investors after a quick buck, Xbox has been pretty profitable over the last 4-5 years, Playstation basically in the same in the boat ATM Sony lost all the PS1/2 profits las GEN.

Well, having to blow over $1 billion on RROD Warranty Repairs and another $100 million on Xbox Controller R&D, you can see why.

Not to mention how much they blow on advertising and timed exclusivity deals...

Microsoft needs a shakeup. Sadly, Ballmer isn't going anywhere for 12 months.. just long enough to watch the XB1 flop like the Surface/WindowsPhone/Windows8...

Bill Gates needs to get back on top of his company and straighten things out.

[QUOTE="arredondo"]

The numbers don't lie. Overall the Gaming Division at Microsoft has been sucking the company dry. Note the bar on the far right:

 

R3FURBISHED

And as I stated before, in this thread...to you! that numbers can always be easily twisted. I see that as five consecutive years of profit.

You can't ignore the bar on the right that says "total" though. Even with those years of profit their Xbox division isn't profitable.

The numbers don't lie. Overall the Gaming Division at Microsoft has been sucking the company dry. Note the bar on the far right:

 

 

 

 

arredondo

Also note that while the total is negative, the last few years have been profitable - MS knew that the with the original Xbox they were investing in something that was going to grow long term and it's taken untill recently with the 360 for it to show a return on that investment.  Now it's up to the X1 to continue the trend and justify the xbox - though they don't appear to be off to a great start. 

[QUOTE="arredondo"]

The numbers don't lie. Overall the Gaming Division at Microsoft has been sucking the company dry. Note the bar on the far right:

 

 

 

 

Alpha_S_

Also note that while the total is negative, the last few years have been profitable - MS knew that the with the original Xbox they were investing in something that was going to grow long term and it's taken untill recently with the 360 for it to show a return on that investment.  Now it's up to the X1 to continue the trend and justify the xbox - though they don't appear to be off to a great start. 

Based on those numbers, it will take 3 or 4 more years for them to just break even.

[QUOTE="R3FURBISHED"]

[QUOTE="arredondo"]

The numbers don't lie. Overall the Gaming Division at Microsoft has been sucking the company dry. Note the bar on the far right:

 

R4gn4r0k

And as I stated before, in this thread...to you! that numbers can always be easily twisted. I see that as five consecutive years of profit.

You can't ignore the bar on the right that says "total" though. Even with those years of profit their Xbox division isn't profitable.

Or you could look at it as the original Xbox set the framework for what led to years of profit. You have to spend money to make money, Microsoft spent money building the Xbox brand and name and now are enjoying the fruits of their labor.

Third time: You can always present the flip side of a financial analysis.

[QUOTE="R3FURBISHED"]

[QUOTE="arredondo"]

The numbers don't lie. Overall the Gaming Division at Microsoft has been sucking the company dry. Note the bar on the far right:

 

R4gn4r0k

And as I stated before, in this thread...to you! that numbers can always be easily twisted. I see that as five consecutive years of profit.

You can't ignore the bar on the right that says "total" though. Even with those years of profit their Xbox division isn't profitable.

Also note that while the total is negative, the last few years have been profitable - MS knew that the with the original Xbox they were investing in something that was going to grow long term 

Alpha_S_

True it was a long term investment but here we are, almost 13 years later and this division is still not as huge as MS thought it would be. How long is this long term exactly?

Let's not forget that they managed to ruin the brand a bit and go backwards with One presentation. 

[QUOTE="Alpha_S_"]

Also note that while the total is negative, the last few years have been profitable - MS knew that the with the original Xbox they were investing in something that was going to grow long term 

edidili

True it was a long term investment but here we are, almost 13 years later and this division is still not as huge as MS thought it would be. How long is this long term exactly?

Let's not forget that they managed to ruin the brand a bit and go backwards with One presentation. 

Sony is patiently waiting for Nintendo to go under completely and Microsoft to back out of the console market and then Sony will take over the market and make all the money for that industry. And they will because they are patient and they care alot about the gamers. And now that supposedly the computer industry is suffering Sony knows its just a matter of time and they are very willing to wait. And for that is why they will rule the video game industry. Which is an enormous industry at that. I have alot of respect for Sony and Im hoping it works out for them considering what they have been through. RimacBugatti

Out of the big 3 Sony is in by far the worst state, so ya.....

Try harder damien you are truly a pathetic fanboy

The Xbox One is probably what's killed it for some investors. They spent so long building up good will and a good brand and were finally in a position to just put a new box out and watch the money and Live fees roll in and instead they've managed to single handedly destroy their brand in the space of a few months.Ninja-Hippo

Yeah they blew it. You have to prove yourself everytime, don't rely on consumer fanboyism this much. Don't just come up with a turd and expect for people to eat it up only because of the brand name.

Sony made the same mistake with that pricey PS3 in the beginning. They thought the brand is too big to fail. Well surprise surprise. 

The same happened to Sony before, some investors suggested the media dept to be sold.

Investors are never happy with anything...

cool crash......

"Analyst Rick Sherlund claims that big changes are going to take place very soon as other shareholders support the decision to get rid of Steve Ballmer in addition to the investment group ValueAct. According to the report ValueAct are seeking to replace Steve Ballmer because his strategy inspires little confidence." Well as Balmer is already resigning I think that kicks that leg out :Pblue_hazy_basic

The analyst made the comments before Ballmer grabbed a parachute and lept out of the MS plane. It may very well be the case that this potential uprising is what pushed him out before things got ugly and more public.

And for those blowing off a 1% stock holder, please note that his 1% is $2 billions worth in opinions, and that top MS leaders like Paul Allen only own 2% of the company. Even Ballmer himself only owns 4%!

The Xbox makes a lot of money now, but it just hasn't recouped the losses of the original Xbox and RROD.

If they can maintain the same type of success Xbox has seen in the last three years then they can make some good money. Though I guess it could also be said that the opportunity cost for the Xbox is too high when they could just put those same employees towards PC development.

The same happened to Sony before, some investors suggested the media dept to be sold.

Investors are never happy with anything...

ManatuBeard

http://www.eteknix.com/microsoft-investor-wants-to-fire-ballmer-and-sell-xbox-division/

 

ouch!! after a decade Xbox still hasnt' made any profit

-Damien-

Furthermore it is believed they might target the Xbox division and try and get rid of it altogether. This would allow Microsoft to focus on other products and mainly Windows. Xbox is cool, but by our estimates Microsoft has not made money at this

[QUOTE="edidili"]

[QUOTE="Alpha_S_"]

Also note that while the total is negative, the last few years have been profitable - MS knew that the with the original Xbox they were investing in something that was going to grow long term 

Ninja-Hippo

True it was a long term investment but here we are, almost 13 years later and this division is still not as huge as MS thought it would be. How long is this long term exactly?

Let's not forget that they managed to ruin the brand a bit and go backwards with One presentation. 

It never helped, that they chose to enter the market in competition with the PS2. We all want the PS2 back in a sense and that's indirectly what we're being promised.

[QUOTE="-Damien-"]

ouch!! after a decade Xbox still hasnt' made any profit

Yet still, MS keeps focusing on Xbox instead of their PC division, which has made a lot of profit.

This news surprises me though, as I thought Xbox Live would've brought in loads of money. :?

Only way this happens if the Xbox is a total flop and in fanboy eye it might turn out to be. PS4 might outsell X1 2:1 but with enough people buying to still eventually make a profit. Unlike what people think these companies are in it for the money not to make people happy so it depends if the X1 can do what the 360 did and turn a profit in a reasonable time. Then again even if the X1 fails I could see them in 5 years just make a new console that they know will sell and undercut PS by a 1-3 years with a much stronger console for the same money.

Uh oh, things may get even worse for Microsoft as this investor uprising against their overall strategy appears to be a thing.

(Reuters) - Members of Microsoft Corp's board have held talks with ValueAct Capital Management LP in recent days over the activist shareholder's demands to secure a seat on the company's board, two sources close to the matter said on Friday.

ValueAct, which wants a say in the way the world's largest software company is adapting to the new world of mobile computing, is seeking to nominate a person from its own organization, the sources said.

The news comes as Microsoft had its biggest sell-off in four years, wiping $34 billion off its market value, after quarterly results were hit by weak demand for its latest Windows system and poor sales of its Surface tablet.

San Francisco-based ValueAct, which manages more than $10 billion for clients, owned 33 million Microsoft shares as of March, which is 0.4 percent of total shares outstanding, but it is believed to be buying more.

The fund, co-founded by finance industry veteran Jeff Ubben in 2000, has made a reputation for building stakes in companies and working with management in private to change fundamental strategy. ValueAct's other major holdings include Adobe Systems Inc, Motorola Solutions Inc and Valeant Pharmaceuticals International Inc.

In recent months a number of Microsoft's top institutional investors have contacted ValueAct, expressing concern over management execution and strategy, the sources said.

High among the issues in the talks, which the sources described as ongoing, is the apparent lack of succession planning at the top of the company. Steve Ballmer has held the chief executive job since 2000 and shows no signs of relinquishing it.

Ballmer, 57, once remarked that he envisaged staying on until his youngest child goes to college, which would be around 2017 or 2018, but since then he has not publicly addressed the matter.

ValueAct and Microsoft declined to comment. The software company has previously said there is a CEO succession plan in place, but has declined to give details of it.

UNDER PRESSURE

Microsoft's huge stock drop on Friday, prompted by its financial results and a $900 million write-down on the value of unsold Surface tablets, provoked fresh skepticism of Ballmer's new plan to reshape Microsoft around devices and services.

"The recent reorganization does not fix the tablet or smartphone problem," Nomura analyst Rick Sherlund said in a note to clients on Friday. "The devices opportunity just received a $900 million hardware write-off for Surface RT and investors may not even like the idea of wading deeper into this territory."

ValueAct is thought to oppose Microsoft's recent foray into making its own devices.

Microsoft and Ballmer have been the targets of much criticism over the past decade, chiefly for falling behind Apple Inc and Google Inc in the shift toward mobile computing.

The company, however, has not been subjected to much overt protestation from shareholders. The most public challenge came two years ago, when Greenlight Capital's David Einhorn, who made his name warning about Lehman Brothers' financial health before the investment bank's collapse, called for Ballmer to step down.

Microsoft never responded publicly to that call, and the company's board has never indicated any major disapproval with Ballmer's performance, although it did trim his bonus last year for sagging Windows sales and a mistake that led to a massive fine by European regulators.

ValueAct may find it difficult to stir up change at Microsoft, even if it does get a seat on the board, given that co-founder and Chairman Bill Gates has long been a solid supporter of his old friend and colleague Ballmer.

Gates, who founded Microsoft in 1975 with Paul Allen, still owns about 4.8 percent of the company and is the largest individual shareholder. Ballmer, who is also on the board, owns about 4 percent.

Alongside Gates and Ballmer, seven independent directors make up Microsoft's nine-person board. The lead independent director is John Thompson, a former Symantec Corp and IBM executive.

Microsoft's shares closed down 11.4 percent at $31.40 on Nasdaq on Friday, but recovered slightly to $31.58 in after-hours trading, after the news that board members were in talks with ValueAct.

Ballmer left after this was published. I hope you XBone pre-order customers save your receipts - I wouldn't be surprised if they kicked this gaming gadget out of the company completely.

[QUOTE="Alpha_S_"]

[QUOTE="arredondo"]

The numbers don't lie. Overall the Gaming Division at Microsoft has been sucking the company dry. Note the bar on the far right:

 

 

 

 

Netherscourge

Also note that while the total is negative, the last few years have been profitable - MS knew that the with the original Xbox they were investing in something that was going to grow long term and it's taken untill recently with the 360 for it to show a return on that investment.  Now it's up to the X1 to continue the trend and justify the xbox - though they don't appear to be off to a great start. 

Based on those numbers, it will take 3 or 4 more years for them to just break even.

It's worse than that, the next coupel of years are going to see the return of losses as they subsudize the new console. It'll turn profitabble again in year 3 or 4 though. But they'll STILL be in the hole, possibly until the end of the next generaiton.

That's assuming their market model doesn't change, but I think it will. I think toward the end of this gen, digital distribution on consoles will take off, and their profit margins will widen. By the end of the enxt gen, MS's xbox division should be profittable, but man, it's going to take them a decade and a half.