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Microsoft Considering selling Xbox brand

VulcanRaven I don't knowMembers Posts: 18,859 ✭✭✭✭✭
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.

Elop is reportedly considering a strategy shift away from Microsoft’s tradition of Office running primarily on Windows PCs. Bloomberg reports that Elop is formulating "some broad strategic outlines for Microsoft," in what is likely to be part of the interview process for the CEO position. Elop’s potential strategy is said to involve maximizing sales of Office instead of using it to push Windows PC and tablet sales. Microsoft’s Office and server software has been performing well in recent financial results, while Windows continues to struggle alongside a declining PC industry. Although Office has launched for iOS and Android, Microsoft could certainly do more to offer complete versions on those rival platforms.

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.


Shareholders want them to sell Xbox
Xbox is one of the areas of success for Microsoft and is cool to consumers, but it is perhaps time to assess whether this can ever be material to the overall company and might be more leverage to a consumer-oriented company such as Samsung. Perhaps they would be willing to pay several billion dollars for this to leverage their substantial consumer electronics business? Shareholders might want to know if they could possibly be better off if Xbox were spun out as a separate company or sold. Either way, it is not that material to the overall valuation of Microsoft and will not likely determine the success of Microsoft going forward; it’s just not profitable enough to move the needle that much at the company.

Ouch. I knew the brand was not making as much money as people claimed, but I did not think the thought to sell it would be an option. I doubt it will happen, but it shines some light on the truth about how successful Xbox is and has been for those that think they got a strangle hold on the gaming industry or MS can buy their way to success. Those COD map packs ain't keeping the lights on.