
Investors want Microsoft’s new CEO to kill Xbox, Bing and Surface - mafuyu
http://www.washingtonpost.com/blogs/the-switch/wp/2014/02/05/investors-want-microsofts-new-ceo-to-kill-xbox-bing-and-surface/
======
beloch
One word: Idiots.

Seriously, those investors are morons. MS has never been a a company that fits
the adjective: "lean". MS is practically a post-secondary institution unto
itself! MS' far-reaching speculative research is the stuff of legend, and far
too infrequently translated into the commercial sphere. Anyone who thinks they
should narrow their focus and ignore _more_ of the fruits of their labor
instead of _less_ is an _idiot_.

~~~
jfoster
Well, not necessarily idiots. I'm sure they understand the longer term value
of those brands and products to Microsoft. Investors are not necessarily in it
for the long-term, though. They might buy a substantial stake, pressure the
CEO into cutting valuable (but currently loss-making) divisions, and be
looking to sell that stake after a couple of really strong-looking quarters.

None of that is good for Microsoft, but the investors are potentially behaving
quite rationally. (if a bit destructively...)

~~~
Joeri
This is the thing that is often glossed over when discussing what investors
want out of a company. The primary goal of an investment is to provide a large
return in a short timeframe, regardless of what happens after cashing out.
Burning up a company's future to inflate short-term profits can be a perfectly
fine strategy for an investor. You could argue that the last people who should
have a say in how a company runs its affairs are the investors, because they
are the most likely to make decisions that are bad for the company.

------
sentenza
Listen, I'm no fan of Microsoft, but those investors better keep their hands
of the ergonomic keyboard product line, or I'll... I'll... probably have to
stockpile them?

Seriously though, the ergo 4000 is the best keyboard I've ever owned and I'd
hate to see it gone by the hand of somebody who just doesn't care enough.

~~~
julianpye
Potential Stockpiler of the 4000 here as well. We should form an interest and
alert group for the day when it becomes reality... :)

~~~
mseebach
The point of stockpiling is that you do it _before_ scarcity sets in.

------
jinushaun
I feel like making a u-turn to be "all in" on enterprise is the wrong move and
just delaying the inevitable.

Computing devices are no longer bought in large numbers by exclusively big
businesses. The iPhone has shown that business customers go home, buy consumer
products, love how much better it works than what they use at the office and
want to bring it to work. The recent data on mobile device sales compared to
Windows PCs is especially damning.

Secondly, Google, Facebook and the rest of "new tech" industry is not built on
MS tech. What is actually enterprise? Size? If a gigantic company like Google
can crunch all that data and have such amazing uptime without MS tech, then
who needs MS? Every year a new generation create their own startup and they
choose anything but MS. To me, enterprise means established, old and slow. If
all the old guards will be disrupted and die out like I think they will, then
MS will have no one left to sell to! Increasingly even the old guard is
messing around with Linux and OSS in order to be more agile.

Consumer is the future and MS needs to embrace it or die. They just have to
stop making mistakes like Windows 8.

~~~
arethuza
"Consumer is the future and MS needs to embrace it or die"

Google and Facebook may be huge, but as a percentage of the global economy
they are still pretty small (e.g. look at the Forbes Global 2000) - the
enterprise world is _everything_ all those other companies need to operate and
it's the world of IBM, Oracle, SAP and Microsoft and thousands of specialized
ISVs.

I'd be rather surprised if Google or Facebook wrote their own consolidated
financial reporting or payroll software (indeed Google seems to use Oracle
Hyperion FM for consolidated reporting and planning, as does Facebook).

At the moment, Microsoft has some pretty decent enterprise products, but they
only sell them through partners - one possibility for growth and really
focusing on the enterprise space would be to emulate IBM and focus on services
_and_ products - either by greatly increasing the size of their existing
consulting arm and/or buying a few of the existing large service partners.

------
quaunaut
Wait, they what?

Bing and Surface I can understand to a degree, but they want Microsoft to kill
Xbox, one of their strongest brands, and one of Microsoft's only hopes for
differentiation? For what, to chase the smartphone game or something?

~~~
adamors
Considering just how big of a financial black hole Xbox has been throughout
the years, it's not surprising.

Some sources say the 360 lost about 3 billion[1] while others that it lost 2.5
billion PER year[2].

The Xbone lost about 1 billion dollars so far (was expected to lose 2)[3]

And it's not just Microsoft that is losing money on these consoles, Sony is in
the read as well. [4]

[1]: [http://www.neowin.net/news/report-microsofts-xbox-
division-h...](http://www.neowin.net/news/report-microsofts-xbox-division-has-
lost-nearly-3-billion-in-10-years)

[2]: [http://www.destructoid.com/analyst-microsoft-
losing-2-billio...](http://www.destructoid.com/analyst-microsoft-
losing-2-billion-on-xbox-annually-265273.phtml)

[3]: [http://bgr.com/2013/11/26/xbox-one-profit-
estimate/](http://bgr.com/2013/11/26/xbox-one-profit-estimate/)

[4]: [http://www.vg247.com/2013/01/07/xbox-360-and-ps3-losses-
tota...](http://www.vg247.com/2013/01/07/xbox-360-and-ps3-losses-
total-8-billion-ex-sony-employee-paints-grim-future/)

~~~
hershel
Why should MS invest in hardware, when PC's offer better hardware, run the
windows store to share profit with MS and have good enough DRM(as steam shows,
and might even be improved by working with pc manufacturers) ?

Most likely in the future, MS will do something similar to steam - just sell
software for so called "consoles", and have hardware partners. That will help
with the losses issues.

~~~
adamors
I honestly don't know, especially with Valve's Steambox on the way. It was a
losing fight from the beginning, and this generation is already doomed right
from the start.

~~~
hershel
But valve is doomed because of linux. MS don't have this problem. They could
easily merge xbox + windows on a steam like platform if they wanted to .

~~~
rhodimus
That is pretty much what Games for Windows Live is/was. It didn't go very
well.

------
andyjohnson0
_" Morfit is a 37-year-old activist investor whose employer, the private hedge
fund ValueAct, acquired a 0.8 percent stake in Microsoft in August. That was
enough to put Morfit on the board."_

Slightly OT, but how does owning < 1% of a company's shares qualify for a
board seat? Can someone who knows about these things enlighten me?

~~~
lutusp
> Slightly OT, but how does owning < 1% of a company's shares qualify for a
> board seat? Can someone who knows about these things enlighten me?

That's easy to explain:

1\. Corporate boards should show a fair representation of the largest
stockholders.

2\. For a board with 100 members, it should be apparent that anyone with more
than 1% of the corporation's stock must be given a place on the board. But
this only makes a point and isn't a typical board -- 100 members is unwieldy.

3\. Another case is one in which the majority of the corporation stock is held
by many small investors and there are only a few majority stockholders. In
this case, someone holding more than an individual investor but less than the
majority investors may still earn a place, even on a relatively small board.

4\. Another way to describe this is to take the number of board seats and
distribute them among those individuals who hold the largest stock holdings,
in declining order. For example, let's say there are ten board positions, five
majority stockholders and a pool of smaller investors with quickly declining
stock percentages. In this case, a stockholder with a very small stake might
acquire a position on the board simply by being counted among the ten largest
stockholders.

------
Aloha
Probably not.

This is about the myopic quarter to quarter focus on profits by the market,
the stock market in the last 30 years has been increasingly unable to to focus
on the long game - if it does generate income or profit by the next quarter,
its rubbish.

This attitude has wormed its way all through the economy, its part of why its
hard to get a company to promote from within - they expect their employees to
come from the outside with all the tool/skills/knowledge to hit the road
running - even if they are at a significant disadvantage in actually
understanding a companies operations. It used to be you could get an entry
level job and company X, and expect a regular set of promotions up the chain,
now, to get that promotion, you need to go work some place else almost.

~~~
WalterBright
> This is about the myopic quarter to quarter focus on profits by the market,
> the stock market in the last 30 years has been increasingly unable to to
> focus on the long game - if it does generate income or profit by the next
> quarter, its rubbish.

I've seen this sentiment about the market like, forever. Yes, I've been
investing in the market for 30 years.

But I seriously doubt that investors are so stupid. If they were pushing up
stock prices based on quarterly results and the long game be damned, then
where are all the smart investors shorting those companies? Are you making
money on shorts?

And, why are there companies like Amazon with enormous P/E's? Clearly,
investors are playing the long game with them.

~~~
Aloha
You sorta made my point for me. My argument is that the market wants quarter
to quarter growth over stability. There are many industries that are stable,
generate lots of revenue, are profitable, but do not generate high stock
prices because of no growth, like:

Truck Stops Utilities Tire Companies Banks Insurance

My argument is before the mid 80's - the focus was on the dividend not on the
stock price itself, IMO, buying and selling based on stock price, rather than
earning disbursed to shareholders, is merely speculation, rather than
investing.

~~~
WalterBright
The focus on dividends vs stock appreciation is driven by the difference in
tax treatment of the two. Tax policy has alternately favored one over the
other, with the predictable resulting shift in investor focus.

Saying stock purchasing anticipating future growth in the stock price as
"mere" speculation is very incorrect. A company can choose to issue a dividend
or repurchase stock (thereby pushing up the price), these are economically
equivalent. The choice is made based usually on tax treatment.

------
gtirloni
That's not going to happen anytime soon. Especially for Bing which powers not
only the search website but many other Windows infrastructure in the
background. With the Surface, even if it doesn't make any money, it serves the
purpose of showing OEMs what they could/should be doing (much like with Google
Nexus devices). And Xbox... they will be holding on there for as long as the
whole console industry can (same for PS4).

We are going to see all Microsoft stakeholders (from investors to employees to
managers) try their hand at the new CEO. No surprise the first movers are some
investors, they're greedy and in just for the money.

------
TrainedMonkey
Investors would also want Google to kill G+. Product line does not have to
make money to be significant part of the brand.

~~~
dredmorbius
ORLY? References / sources?

~~~
lachlanj
OS X. Now free

~~~
Adirael
That's completely different. OS X is not really free, the same way iOS is not
free. It just comes bundled with the hardware and you get updates till the EOL
of the product.

~~~
nly
Much like Android. It's free for 12 months or so, after which your product
support is shrugged off.

------
Aoyagi
Killing XBox brand and not killing Windows Phone? I don't understand. WP8 is
getting numbers hugely thanks to very cheap Lumia 520, which, to my
understanding, is barely generating any profit or is even generating loss. And
even then I haven't seen anyone who said "Wow, this is great, my next phone
must have WP in it!"... a priori fanbois aside.

~~~
Already__Taken
Anecdotal but I've seen a few friends, some techie that want /use the windows
phone. Seems to appeal to the "I just want a damn phone" crowd.

------
rdl
I wonder if they could sell Xbox to Lenovo for $huge. I don't think consoles
are going to do very well this time -- mobile gaming killed the market for
'people who will tolerate lower spec hardware because it's convenient', and
IIRC the PS3/360 were better relative to $2k PCs when launched than the
PS4/Xbone are today relative to $2k PCs. The PS3/360 have been pretty mediocre
for years, so the PS4/Xbone are going to get mediocre in a couple of years, so
there's a long period of ugh ahead.

Media convergence is the only reason to keep the Xbone business, but if
Microsoft focuses on Enterprise (or at least "work"), that doesn't matter,
either.

~~~
adamnemecek
I don't play games at all but saying that gamers moved to mobile games is
beyond silly.

~~~
CmonDev
There will be stronger separation between casual and hardcore when Oculus Rift
is out. Mobile is something you play on the train.

------
quanticle
It doesn't make a lot of sense for Microsoft to kill XBox. Killing XBox would
mean throwing away a successful line of business that is finally generating
substantial profit after nearly a decade of investment. It would also be
terrible for morale at the company. Here is a scrappy part of the business
that went into a market where Microsoft was laughed off when it entered: game
consoles. And after a dozen years, they've gone from last-place losers to a
dominant, #1 position with the XBox 360. If the reward for this victory was
dissolution and abandonment, then what motivation would there be for anyone to
do any kind of innovative or disruptive work at Microsoft?

~~~
josephlord
> to a dominant, #1 position with the XBox 360

Only in the US. Globally it certainly wasn't dominant and was probably behind
the PS3.

------
pedalpete
Killing Surface may be premature. As far as I can tell, Surface Pro 2 is
currently out of stock basically everywhere.

Windows RT, I'd be happy to call that one pretty much dead anyway. Unless they
can figure out a way to get full windows apps running on ARM devices, I don't
see the point. Intel chips are going to improve in performance and battery
life to the point where they are nearly comparable with ARM (or at least to a
point where it matters). Then, the argument would be mute and we won't be
making a decision between RT and Full Windows.

Bing, I'm not so sure. I actually quite like Bing, but I don't see where
Microsoft is going to make a huge impact with it.

XBox, I can't believe they're loosing money on it, particularly after the huge
success of the kinect. Either way, it's Microsoft's ticket into the
livingroom.

~~~
nobodysfool
>Surface Pro 2 is currently out of stock basically everywhere

Not really.

[http://www.nowinstock.net/computers/tablets/microsoft/surfac...](http://www.nowinstock.net/computers/tablets/microsoft/surface/)

------
mark_l_watson
I don't own a surface, but I think future version of the Surface might end up
being a very good product, and thus profitable.

I imagine the next version of Surface being 1/3 lighter, 1/3 less expensive,
and I am likely to buy one, even though I don't even own a Windows device
right now.

Off topic: the new lighter iPads are awesome. A very light weight bluetooth
keyboard cover that is designed by Apple and is extremely thin and light
weight would potentially eat the Surface's lunch - for users who don't
specifically need Windows applications.

------
uvTwitch
I don't think many would miss Bing, but killing off the Surface, Windows
Phone, and especially the Xbox, to focus on being another Oracle? What a pair
of fuckwits these moron 'investors' are! I can think of no better way to give
a company like them a slow 10-20 year death. Somebody should fire these poison
shareholders.

------
_pmf_
Killing Xbox is a slippery slope; this would slowly kill Windows as a gaming
platform.

~~~
Mikeb85
Well they already killed their XNA framework...

~~~
pjmlp
Regardless how much XNA was praised, it was a indie only thing.

The majority of professional studios still use C++ based engines.

Unity is the Microsoft's endorsed replacement for XNA, as announced in the
Visual Studio 2013 release keynote.

~~~
CmonDev
Unity is not for everyone though. There is a lot of hobbyists who prefer
writing games instead of scripting ready-made chunks.

Also it has a lot of warts (nothing is ideal):
[http://t-machine.org/index.php/2013/12/27/2014-entity-
system...](http://t-machine.org/index.php/2013/12/27/2014-entity-systems-what-
are-your-unity3d-questions-and-problems/#comments)

XNA is a good public image making tool, not just an API.
[https://twitter.com/search?q=%23becauseofXNA&src=hash](https://twitter.com/search?q=%23becauseofXNA&src=hash)

MonoGame is unfortunately still lacking an own content pipeline.

~~~
pjmlp
Since I am comfortable with C++, I tend to play around with engines with C++
bindings.

I rather use C++ than being stuck in .NET 3.5, without any more modern C#
goodies.

As for scripting ready-made chunks, I guess one has to decide if they want to
make a game or a game engine.

~~~
CmonDev
"I rather use C++ than being stuck in .NET 3.5, without any more modern C#
goodies" \- I use all modern C# features with XNA - what is the issue (except
for async/await maybe)?

"I guess one has to decide if they want to make a game or a game engine" \-
exactly, but there should be a choice. XNA being a framework rather than
engine provided such a choice in a high-level way.

~~~
pjmlp
> I use all modern C# features with XNA - what is the issue (except for
> async/await maybe)?

The libraries are also important and they are stuck on .NET 3.5 offerings.

Another problem is the old version of Mono they are using, which doesn't not
have the JIT and GC improvements of more recent versions.

This is what I was able to gather from online sources, when wondering if it
was worth the time and space to install it.

------
xbadxapple
Well this is a cocky attitude.

They have a bit of right, though. Bing is just downright horrendous, Xbox is a
not-so-good tier compared to other consoles in the sector. They need some
optimization with allocating resources and offering services.

------
rottyguy
With Amazon and Google finding some success in diversifying their offerings,
one must posit if this is what companies need to do to remain competitive and
sustain. Leaders lead!

------
blueskin_
It this means they stop ruining Windows, I'm all for it.

------
qq66
Thank god they're investors and not CEOs.

~~~
CmonDev
They are not even investors, rather short-term-price-fluctuation traders.

------
venomsnake
Well Microsoft got XBOX wrong two times in a row. So no surprises here. Only
the first XBOX was good console IMO. XBone and 360 were disappointments [1].

Surface is also one of the products Microsoft almost got right - there was
real interest on windows on ARM at the time. But full windows.

And Bing - well its only advantage over google is the turned off content
filter.

[1] Owned 360 for 5 years, played 5 hours on it.

~~~
pilif
> [1] Owned 360 for 5 years, played 5 hours on it.

so because YOU only played 5 hours on YOUR 360, the console was a failure?

Let me counter your anecdote with one of my own: The XBOX was a disappointment
and the 360 was a good console. Reason: I played much more on my 360 than the
original.

The 360 was around for a much longer time than the original and there were
many more games made for the 360 than for the original.

If you don't believe that to be enough, there were 24M original xboxes sold,
compared to 80M xbox 360.

~~~
venomsnake
The run of X360 was almost twice of the Xbox. Correct for that. Also PS2
shipped 150 million units by which metric the whole 7th gen was disappointment
because PS3 and X360 managed to ship slightly more combined.

But yes - 360 was a failure. We got stratification of the published,
ballooning budgets, total homogenization of the games. Every abusive trick
ever from publishers on the consoles, red ring of death, needlessly
complicated online survives (the whole MS points crap), XBOX live gold
subscriptions and the console barely broke even at best from every report I
have ever read. The decision for the HDD to be optional was "brilliant". The
first few revisions of the hardware were poorly made. Instead of the ugly but
perfectly cool able and boring xbox we got something elegant, pretty, noisy
and overheating.

