Microsoft’s Xbox Division Will Be “Sold to Someone Like Sony”

According to Forbes contributor Adam Hartung, Microsoft‘s “failure is inevitable,” and its “entertainment division will be spun off, sold to someone like Sony or possibly Barnes & Noble, or dramatically reduced in size.”

Hartung went on to explain that Microsoft doesn’t know how to turn a profit with the Xbox, saying,

“Unable to make a profit, it will increasingly be seen as a distraction to the battle for saving Windows – and Microsoft leadership has long shown they have no idea how to profitably grow this business unit.”

Hartung also believes the company will suffer “enormous layoffs over the next three years,” and will see the closure of Microsoft’s online division as the organization invests more money into combating iOS. He added:

“Microsoft makes more than 75 per cent of its profits from Windows and Office. Less than 25 per cent comes from its vaunted servers and tools. And Microsoft makes nothing from its Xbox/Kinect entertainment division, while losing vast sums in its on-line division.

“No matter how much anyone likes the non-Windows Microsoft products, without the historical Windows/Office sales and profits Microsoft is not sustainable.

“Failure is already inevitable. At this stage, not even a new CEO can save Microsoft. Game over. Ballmer loses. And if you keep your money invested in Microsoft it will disappear along with the company.”

Of course, take this all with a grain of salt. People have claimed the sky is falling before.


via VG247

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6 Comments on Microsoft’s Xbox Division Will Be “Sold to Someone Like Sony”

Brad

On January 21, 2013 at 10:32 am

Good article, but I’m going to have to disagree with your last statement. I’ve had the feeling that Microsoft has been going downhill since Windows XP. It’s something that has taken time, but it does seem increasingly likely. I think that with the rise of alternative operating systems, Windows is not seen in as good a light as it used to, and people are changing to these alternatives as a result. Additionally, we have other, open-source software that can easily take the place of Office, so the truth is Microsoft doesn’t really have a leg to stand on anymore.

However, I believe that Microsoft needs to release it’s past operating systems, free of charge, to the public, and allow others to modify them as they see fit. Microsoft needs to then retool the company to be a game developer, nothing else.

SevenCell

On January 21, 2013 at 1:15 pm

I thought we were done with these loons after December 21st.

bob

On January 21, 2013 at 1:21 pm

what a load of crap this articale is

Ares

On January 21, 2013 at 2:38 pm

Scary thought but maybe, just maybe. Sell consoles at least at cost if not enough to make some profit off them. Selling for way under what it cost to make is stupid. You don’t stay in business long doing things like that.

This could apply to any of the console makers.

R.J.

On January 21, 2013 at 5:56 pm

@Ares

The concept of selling consoles at a loss isn’t as stupid as it seems. These companies make their money from the games that are sold for their systems, and getting consoles in homes is the only way to do that. If they sold them at cost or above it immediately, they’d go for years without selling enough units to come anywhere close to selling enough games, so they’d be sitting on a stockpile of consoles that are just collecting dust, otherwise. People through a fit about the PS3 being so expensive when it first came out and waited for years for the price to come down, even though every PS3 was selling at a loss. This would have been even worse if they started out selling them at cost. Lots of companies outside this industry use the concept of a loss leader. Printer companies don’t give out free printers with new computers because they like losing money on the hardware, they do it because now that customer will be paying for their ink.

As for this prediction, I doubt if it will happen anytime soon. Given the war chest that MS has accumulated over the years, they’re in a pretty good position to ride things out and figure out what to do next.

Justin

On January 23, 2013 at 4:50 pm

This article takes a lot of rather large jumps in its assumptions even a Sony or Nintendo fanboy can tell you these assumptions are ludicrous. This train ride imo happened after windows 8 antihype. Just because windows 8 is a failure doesn’t mean Microsoft will die (as much as I want it to), I mean look at Vista, Microsoft lately has a cycle of good os release followed by terribad released followed by good releases etc.