CEO candidate Stephen Elop said to consider selling Xbox

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#1 Edited by Darji (5293 posts) -

Microsoft is currently searching for a new CEO to replace Steve Ballmer who plans to retire within the next 10 months. Recent reports suggest the company has shortlisted Ford CEO Alan Mulally and former Nokia CEO Stephen Elop as external candidates.Mulally has stated he has no intentions to leave Ford, but a Bloomberg report claims that Elop has big plans if he’s made CEO. After a brief stint as the head of Microsoft’s business division, responsible for Office and other products, Elop’s return to Microsoft in the CEO position would reportedly involve a push for Office on Android and iOS.

Bloomberg also suggests that Elop is willing to shut down or sell some major Microsoft businesses. Elop would reportedly considering killing off the company’s Bing search engine, while contemplating selling the Xbox business. Some investors and analysts have previously called for the software giant to split off its Xbox business and give up on search. Microsoft co-founder Paul Allen appears to feel the same way. Allen’s $15 billion asset manager, Paul Ghaffari, revealed recently that Bing and Xbox have been distractions for Microsoft. "My view is there are some parts of that operation they should probably spin out, get rid of, to focus on the enterprise and focus on the cloud." Nomura analyst Rick Sherlund claims Microsoft’s financial earnings could be boosted by 40 percent in fiscal 2015 if the company sold its Bing and Xbox businesses

Full article here:

http://www.theverge.com/2013/11/8/5080192/microsoft-ceo-candidate-stephen-elop-bing-xbox-rumors

Note that does not mean they are going to kill the console but rather some heavy changes if Microsoft is not involved in it anymore. Investors always wanted this to happenand with the upcomming change it is more adn more likely to happen since the Xbox Brand until now is with over 4 billion $ still heavy in minus overall.

#2 Edited by c0l0nelp0c0rn1 (1811 posts) -

I like that they are looking at killing Bing, now if they can kill Lync and bring it under Skype's jurisdiction I won't have to deal with their stupid office communicator.

#3 Posted by Jimbo (10000 posts) -

Gotta focus on that cloud.

#4 Posted by HermanBloom (94 posts) -

I like that they are looking at killing Bing, now if they can kill Lync and bring it under Skype's jurisdiction I won't have to deal with their stupid office communicator.

I hear you on Lync. Garbage.

#5 Posted by probablytuna (3829 posts) -

Can't imagine Xbox without Microsoft.

#6 Edited by kagato (962 posts) -

Focus on the cloud...what a pile of crap, such a bloody generic term that literally means nothing.

#7 Edited by believer258 (12208 posts) -

What if Sega bought it?

#8 Edited by Chaser324 (6745 posts) -

@probablytuna said:

Can't imagine Xbox without Microsoft.

Well, if the department were acquired by another company, then it is possible that Xbox could diverge from Microsoft's overall direction. However, if this ends up just being a situation where the Xbox division is split off into a separate taxable entity, it's likely that their interests would remain tightly coupled with Microsoft.

Bottom line though is that this stuff is all a ways off from happening, and it's too early to start speculating on what meaningful impact, if any, this would actually have on Xbox owners.

Moderator
#9 Posted by jayjonesjunior (1087 posts) -

Can't imagine Xbox without Microsoft.

I can and it would be great.

#10 Posted by ManMadeGod (1585 posts) -

Elop needs to think about the intangibles that comes with the Xbox brand......... in the U.S. the 360 is "cool" and quite popular. It might make sense to keep it associated with MS even if they aren't making that much money off it.

#11 Posted by Demoskinos (15165 posts) -

Jesus can you even think of the implications of this with how your Microsoft ID so intricately ties into everything? I have no interest in Xbox anymore but man I hope he isn't this naive.

#12 Posted by Darji (5293 posts) -

Elop needs to think about the intangibles that comes with the Xbox brand......... in the U.S. the 360 is "cool" and quite popular. It might make sense to keep it associated with MS even if they aren't making that much money off it.

But for investors this brand is a huge problem. Also I wonder who is even be able to buy this brand except some chinese or easter F2P company^^

#13 Posted by TheHT (11819 posts) -

The Activision X-Box. The AX-Box.

#14 Posted by BigJeffrey (5110 posts) -

Dont kill bing i got amazon gift cards with Bing Points. nah kill that shot

#15 Edited by xyzygy (10079 posts) -

This is a pretty stupid rumour. There is no way they would do this.

I've heard some dumb rumours in my time but this is definitely up there. Xbox is one of the only reasons why an entire generation knows Microsoft.

#16 Posted by jayjonesjunior (1087 posts) -

@xyzygy said:

This is a pretty stupid rumour. There is no way they would do this.

I've heard some dumb rumours in my time but this is definitely up there. Xbox is one of the only reasons why an entire generation knows Microsoft.

Xbox doesn't make money, higher-ups don't like it because of that and who cares about 12-year-olds? Most of them are Mac/IOS users.

Microsoft wants people to get trapped in the Windows ecosystem, that is way they shoehorn Win8, Bing, IE, Skype, and many other non-game-related Microsoft products into the Xbox.

#17 Edited by Chaser324 (6745 posts) -

@xyzygy said:

This is a pretty stupid rumour. There is no way they would do this.

I've heard some dumb rumours in my time but this is definitely up there. Xbox is one of the only reasons why an entire generation knows Microsoft.

Considering the source, I understand why you might say that, but this is a rumor that has been floating around for years. The current restructuring at Microsoft has just stirred it up again, and to be honest, if it was ever going to happen, it would make sense for it to be in the next 1-2 years.

Moderator
#18 Edited by AMyggen (3660 posts) -

@xyzygy said:

This is a pretty stupid rumour. There is no way they would do this.

I've heard some dumb rumours in my time but this is definitely up there. Xbox is one of the only reasons why an entire generation knows Microsoft.

Considering the source, I understand why you might say that, but this is a rumor that has been floating around for years. The current restructuring at Microsoft has just stirred it up again, and to be honest, if it was ever going to happen, it would make sense for it to be in the next 1-2 years.

Yup. If rumours are to be believed, MS isn't exactly making mad money of the Xbox brand either. Interesting times for sure.

#19 Posted by MikkaQ (10344 posts) -

Running a video game hardware business requires ridiculous amounts of capital and support, the kind that only a huge company like Microsoft can provide. I feel like Xbox isn't profitable enough to exist on it's own, and it useful more as a means of acquiring new customers. And even then... who would want it?

#20 Posted by Demoskinos (15165 posts) -

@amyggen: I could have sworn Xbox wad the only profitable division in the company at one point. They have to be making money on the 360 hardware by now.

#21 Posted by shinjin977 (799 posts) -

@amyggen said:

@chaser324 said:

@xyzygy said:

This is a pretty stupid rumour. There is no way they would do this.

I've heard some dumb rumours in my time but this is definitely up there. Xbox is one of the only reasons why an entire generation knows Microsoft.

Considering the source, I understand why you might say that, but this is a rumor that has been floating around for years. The current restructuring at Microsoft has just stirred it up again, and to be honest, if it was ever going to happen, it would make sense for it to be in the next 1-2 years.

Yup. If rumours are to be believed, MS isn't exactly making mad money of the Xbox brand either. Interesting times for sure.

I would like to point out that this is not a rumor. One of the largest share-holder of Microsoft (who just so happen to gain a chair on the board not too long ago) have been pushing for this for a while now. If the X1 loses money, this division will be sold, I actually it make way too much sense. Sony also have been thinking about getting out and focus on insurance but Kaz is not having any of it.

#22 Edited by Darji (5293 posts) -

@xyzygy said:

This is a pretty stupid rumour. There is no way they would do this.

I've heard some dumb rumours in my time but this is definitely up there. Xbox is one of the only reasons why an entire generation knows Microsoft.

This is the actual stand on profit for the division:

http://www.neowin.net/news/report-microsofts-xbox-division-has-lost-nearly-3-billion-in-10-years

And then you have newest analyst saying they burn right now 2 billion$ a year for the brand.

http://playeressence.com/20-year-microsoft-analysts-rick-sherlund-says-xbox-generates-2-billion-in-losses-for-ms-hides-it-with-patent-royalties/

http://www.businessinsider.com/microsoft-earns-2-billion-per-year-from-android-patent-royalties-2013-11

On a financial standpoints it makes total sense to sell the brand off and now with a new CEO there is a huge possibility that it will happen since such a step would get a lot of positive responses

#23 Edited by Kidavenger (3629 posts) -

Elop's saying whatever he can to get that job, if they put him in as CEO it'll be the end of Microsoft whatever he does, the guy takes ever company he has ever been with down the drain. Brain dead yes man.

I'm not surprised Microsoft makes the bulk of their money from enterprise clients, but it's not because they are good at it, it's because they have no legitimate competition in that area, if dropping Xbox meant improving their other products, I wouldn't hesitate to do it, but there is no reason to believe that would happen, Xbox's existence isn't preventing any opportunities in Microsoft's other divisions so I'm not sure what they think they will gain from dropping it.

#24 Posted by Icemo (659 posts) -

@xyzygy said:

This is a pretty stupid rumour. There is no way they would do this.

I've heard some dumb rumours in my time but this is definitely up there. Xbox is one of the only reasons why an entire generation knows Microsoft.

Elop did some pretty stupid decisions at Nokia. No doubt that he can do bad decisions again.

#25 Posted by Darji (5293 posts) -

@icemo said:

@xyzygy said:

This is a pretty stupid rumour. There is no way they would do this.

I've heard some dumb rumours in my time but this is definitely up there. Xbox is one of the only reasons why an entire generation knows Microsoft.

Elop did some pretty stupid decisions at Nokia. No doubt that he can do bad decisions again.

It is not only Elop. " Microsoft co-founder Paul Allen appears to feel the same way. Allen’s $15 billion asset manager, Paul Ghaffari, revealed recently that Bing and Xbox have been distractions for Microsoft. "My view is there are some parts of that operation they should probably spin out, get rid of, to focus on the enterprise and focus on the cloud."

#26 Posted by Phatmac (5730 posts) -

Makes sense considering how much of a financial failure the original Xbox was. It was more powerful then both the Gamecube and PS2 yet not a lot of people gave two shits about it. The 360 certainly made it a lot more popular but the company is still recovering from how much money they lost with the original Xbox. Hopefully the Xbox One continues to be successful. I don't think people realize the consequences that could occur should Microsoft abandon the gaming industry.

#27 Edited by EXTomar (4951 posts) -

I can't fathom why Elop is even a candidate for running Microsoft. Elop left a senior position at Microsoft to go to a struggling company (Nokia), made a risky move that was not necessary (tightly aligning with Microsoft), and it clearly didn't pay off where in the end the value of Nokia was destroyed becoming a bargain for Microsoft to buy.

So if a business has struggling parts that need to be spun off for cheap I suppose Elop is your man.

#28 Posted by kindone (2841 posts) -

Isn't this sort of thing a little bit over our heads to feel like we have any clue what it is really going on?

#29 Posted by ll_Exile_ll (1937 posts) -

I'm just going to put this out there. What if Nintendo bought Xbox?

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#30 Edited by EXTomar (4951 posts) -

Isn't this sort of thing a little bit over our heads to feel like we have any clue what it is really going on?

Actually this describes Elop pretty well. :)

#31 Posted by jimmyfenix (3753 posts) -

Sega has money.......Sega Pluto better with Kinect!

#32 Edited by CptBedlam (4459 posts) -

Man, all these signs ... influential shareholders, Paul Allen, Elop, the Xbox division in turmoil with key people leaving right at launch (Mattrick). This is one of these rumors that I could imagine becomes reality eventually. The biggest problem is probably to find a company that is actually interested in buying.

#33 Edited by MonkeyKing1969 (3041 posts) -

@demoskinos said:

@amyggen: I could have sworn Xbox wad the only profitable division in the company at one point. They have to be making money on the 360 hardware by now.

That was all accounting tricks. The red ink caused by RRoD was just called a loss, transferred off the XBox books, and used to not pay taxes. But that red ink is stiller there for anyone on the board to see, the board of Microsoft has probably sat through numorious meeting where XBox has been seen as 'red ink' on the page. And after all what teh hell does a 50-70 year old board member care about GAMES?

This woudl be how a conversation would go between chairman of the board and any new CEO

NEW CEO: Does it make money?

Chairman: Nope, we're 3 billion in the hole...off the books...but we did lose all the beautiful money and tweak our brand something horrible.

NEW CEO: Can we reduce costs and turn it into a box of pure profit by selling 'gamers/subscriber' as a commodity to cable networks, sports franchies, and game publishers?

Chairman: Nope, we were going to try that and people got very upset by being so clearly turned it a commodity to the point where XBox One appeared to be a total multi-billion dollar loss. So, no we can't sit back with just the box to rake in money.

NEW CEO: What are the prosepects of profitability in near term if we pay attention to the business?

Chairman: Nearly zero near term profitability as usual, but we will see profitability over and above development cost by 2016 if the system sells briskly as XB360 did seven years ago.

NEW CEO: And we're not spinning this unit off, taking a write off, and expending enegry someone else? Wait let me guess: The stock price woudl dip unless we handled the spin off very carefully. Moreover, the best bet is to spin the company to some executive who has left in the past few years and would buy it through some arcane legal, financial deal...yet we don't anyone like that handy. So, we need to keep it but expect little from it for a few years.

Chairman: Correct on all points...meh, gaming what a fucking nuisance.

#34 Edited by ryanwhom (290 posts) -

It is kind of a money pit and the way they've handled one it certainly isnt going to turn around. They're never going to be Nintendo. Or even Sony. They dont know how to make money on hardware.

#35 Posted by Hunkulese (2875 posts) -

Why would anyone buy Xbox?

Paying a ridiculous sum of money for something that'll never bring in a major profit. Not really a solid business decision.

#36 Posted by Krullban (1067 posts) -

Sega gonna get back into the game with the Sega Xbox

#37 Posted by CheapPoison (742 posts) -

I would be oke with it and it might even be a good idea for Microsoft as a business to do so.

What do i know!

#38 Edited by Colourful_Hippie (4498 posts) -

@amyggen: I could have sworn Xbox wad the only profitable division in the company at one point. They have to be making money on the 360 hardware by now.

The money that Xbox makes for them is only a pin drop in comparison to Windows and Office

#39 Edited by Darji (5293 posts) -

@amyggen: I could have sworn Xbox wad the only profitable division in the company at one point. They have to be making money on the 360 hardware by now.

Not even close. Microsoft makes the most money with apps for businesses. And Android also makes a ton of money right now. That is why investors want to split off the whole division or even sell them.

#40 Edited by Nictel (2441 posts) -

@xyzygy said:

This is a pretty stupid rumour. There is no way they would do this.

I've heard some dumb rumours in my time but this is definitely up there. Xbox is one of the only reasons why an entire generation knows Microsoft.

Nice joke post.

#41 Posted by RoarImaDinosaur (191 posts) -

If they do spin it off. My prediction is Google buys them.

#42 Edited by xyzygy (10079 posts) -

One thing I don't really understand is why they'd kill off Bing though. It's like the 16th most visited website in the world, according to Alexa, and that is pretty impressive for a search engine that started well after Google got big.

#43 Posted by Hailinel (25205 posts) -

"Hello, Nintendo? You want a powerful console with a built-in network architecture and userbase? It even has some of that motion-control stuff you like. Yeah, didn't really want to sell, but... I don't know. You want it? People have wanted Mario on Xbox for years."

#44 Posted by McShank (1630 posts) -

@xyzygy said:

This is a pretty stupid rumour. There is no way they would do this.

I've heard some dumb rumours in my time but this is definitely up there. Xbox is one of the only reasons why an entire generation knows Microsoft.

Most of this "generation" have their parents buy them stuff still. Anyone in their 20's knows microsoft and uses windows / linux vs mac if they are serious about PC's and build them and not buy into apple. Xbox is a money pit for Microsoft and since its not a private company, Investors make the final decision which will most likely drop or sell Xbox to another so they can invest more into their original products while stopping the Console war with sony & nintendo and getting rid of Bing vs Google. Elop pretty much created the Nokia purchase by microsoft and windows is part of the reason it dropped from its heights of being one of the best phone makers. I love how Windows 8 looks on phones but honestly, there isnt enough want for it yet and Xbox is not a selling point for those phones which means Why keep it? Sure, people like / love Xbox but it wouldn't mean they cant just go buy Sony or Nintendo product for their gaming needs and they can instead invest their money somewhere else that is either producing Less red ink on their earnings or Improve the ones that are still giving them profit. So far, Microsoft has Covered their A$$ with the revenue they get from licensing fee's they get from Android. This is covering both Windows phone's & Xbox due to the billions they get for the licensing of their Tech. So tell us, Why keep xbox? Just because of a few good games currently on the platform? If xbox closes, games will be made still, just on another console, this has happened many times before. This will also help Nintendo if Xbox is shut down or sold due to less competition meaning they would see increase in sales and help get a foot back in the door of being competitive in consoles as there are not many companies that will / can run Xbox like microsoft and throw money around like they have to have it be as big as it is.

#45 Edited by Budwyzer (635 posts) -

MS decides to sell XBOX.

Valve buys it.

Everyone is OK with that.

#46 Posted by Nasar7 (2809 posts) -

@darji: bad investors focus on short-term profitability. Xbox is literally the only thing MS makes that gets people excited. Losing that goodwill would be a mistake for MS across the board.

#47 Edited by Darji (5293 posts) -

@nasar7 said:

@darji: bad investors focus on short-term profitability. Xbox is literally the only thing MS makes that gets people excited. Losing that goodwill would be a mistake for MS across the board.

No it does not it loses money since beginning and Microsoft makes its money with business applications you may know them because of Xbox but that does not mean how they make the money.

#48 Posted by MikkaQ (10344 posts) -
@extomar said:

I can't fathom why Elop is even a candidate for running Microsoft. Elop left a senior position at Microsoft to go to a struggling company (Nokia), made a risky move that was not necessary (tightly aligning with Microsoft), and it clearly didn't pay off where in the end the value of Nokia was destroyed becoming a bargain for Microsoft to buy.

So if a business has struggling parts that need to be spun off for cheap I suppose Elop is your man.

Well Nokia was worth a lot more before Elop made those deals with Microsoft... and now Microsoft bought Nokia at the lower price... you could argue that Elop was sent to tie Nokia into a relationship with Microsoft and ensure a smooth acquisition, being promised a nice position at Microsoft upon his return. Hell he never even moved to Finland the whole time, keeping his household in Redmond, WA close to Microsoft.

Yeah it's a bit of a crazy conspiracy but the business world is cutthroat as shit and if a big company feels like they can get away with something, they will certainly try it.

#49 Edited by slyspider (1372 posts) -

Wtf will microsoft be without xbox? They actively hate PC gaming and their mobile stuff failed didnt it?

Online
#50 Posted by JazGalaxy (1576 posts) -

@xyzygy said:

This is a pretty stupid rumour. There is no way they would do this.

I've heard some dumb rumours in my time but this is definitely up there. Xbox is one of the only reasons why an entire generation knows Microsoft.

Monetary decisions aren't made on facts like that.

They don't care about polularity, they care about dollars.

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