Steve Ballmer on Don Mattrick’s Departure, Xbox One Strategy
Once again, we find Microsoft dominating the news cycle with the announcement this afternoon that Don Mattrick has left his position with the company and will be assuming command of social gaming company Zynga.
As we noted in our analysis, this move makes considerable sense for Mattrick, as Zynga was built exclusively on the notion of always-online gameplay the former President of Microsoft’s Interactive Entertainment Business quixotically (and petulantly) championed for Xbox One. But where does this leave Microsoft? In largely the same place, as it turns out, but with one key difference: it appears there is no plan to replace Mattrick.
In the wake of Mattrick’s announcement, Microsoft CEO Steve Ballmer sent an email to employees that has now been made public. Perfunctorily wishing Don Mattrick success in his new position, Ballmer then confirmed that he will be assuming Mattrick’s job duties. “Don’s directs will report to me and will continue to drive the day-to-day business as a team,” Ballmer explained, “particularly focused on shipping Xbox One this holiday.”
Ballmer’s assumption of Mattrick’s duties appears to be open-ended. At no point does he mention a search for his replacement. Perhaps that’s due to the weirdness of the title “President of Microsoft’s Interactive Entertainment Business”, which feels a bit like something you come up with when you invent your own job. There’s also the fact of Microsoft’s upcoming company reorganization, set to be unveiled later this week. With Mattrick out, the company may have decided there’s no need to replace him directly.
Now, we know that rumors of Mattrick’s possible leaving have been spreading since early spring, but that doesn’t appear to have any bearing on this current situation. A report by Fast Company from today sheds more light on the matter, suggesting that Mattrick might have been pushed out.
It seems Mattrick had hoped for a promotion in Microsoft’s new corporate structure, but instead was offered the position of head of the hardware division. As Fast Company notes, in terms of prominence and power within the company, this was a demotion. But more importantly, Mattrick, you will no doubt never forget, oversaw a brutally humiliating Xbox One reveal, and unwittingly made his name synonymous with “poor consumer outreach.”1
Harsh criticism for Xbox One’s unpopular DRM and always-online restrictions was intensified no doubt by some of Mattrick’s less diplomatic comments, but as I noted the day that Microsoft announced its reversal on Xbox One, the last straw had to be the reaction from the military community. The Navy Times famously called the Xbox One’s always-online requirement “a sin against all service members,” a brutal indication of the state of Microsoft’s reputation with the armed forces.
Fast Company’s report backs that theory, citing one “Microsoft executive” who said this particularly upset Ballmer, since the company has a close business relationship with the US Military. While it’s unlikely Microsoft would have lost contracts as a result of the blunder, doing business with someone who is really mad at you almost always comes with an expiration date. But lest you think Mattrick was speaking out of turn with those policies, comments made by Ballmer offer an interesting counter argument.
“I’m particularly excited about how Xbox pushes forward our devices and services transformation by bringing together the best of Microsoft,” Ballmer said. “The consoles are incredible all-in-one devices with built-in services that consumers love, including Bing, Xbox Live, Internet Explorer, SkyDrive and Skype. And, just as important, Xbox Games, Xbox Video, Xbox Music and SmartGlass light up Windows PCs, tablets and phones.” (Emphasis mine.)
This makes what one assumes to be the core function of a gaming console – games – look like nothing more than a grudging afterthought, included more because it’s a legacy feature than the actual point. Perhaps that’s an unfair analysis; after all, when you offer so many features in one device, listing them all necessarily diminishes emphasis on any one of them. And yet, the fact remains that Ballmer’s own language, no doubt carefully chosen, reduces gaming to one of many Xbox One features, and in order of importance, behind Bing.
I’ve seen plenty of commentary online from people convinced that Microsoft’s retreat on DRM and always-on functionality is only temporary. Some of the more suspicious commentators have even suggested Microsoft might simply pack them back in shortly after release, customer expectations be damned. That’s way too paranoid in my view, but no doubt in the long term, Microsoft is fully committed to eventually going there. My guess: when they try again, at least part of that effort will include some close, personal coordination with the US Military.
For now though, a word of advice to Microsoft: Nobody likes Bing. Well, nobody cool, anyway. Go ahead and screw us with DRM and always-online requirements, but at least don’t insult us.
The full text of the email follows:
Zynga announced today that Don Mattrick would be its new CEO, effective July 8. This is a great opportunity for Don, and I wish him success. Don’s directs will report to me and will continue to drive the day-to-day business as a team, particularly focused on shipping Xbox One this holiday.
Since joining IEB more than six years ago, Don and his team have accomplished much. Xbox Live members grew from 6 million to 48 million. Xbox 360 became the No. 1 selling console in North America the past two years. We introduced Kinect and have sold more than 24 million sensors. We released fantastic games, and, most importantly, we expanded Xbox to go beyond great gaming to deliver all the entertainment people want — sports, music, movies, live television and much more.
In the past month, the IEB team showed for the first time here on our Redmond campus, and again at E3, how we are going to continue to transform entertainment with Xbox One. I am incredibly proud of the work and vision culminating in Xbox One.
I’m particularly excited about how Xbox pushes forward our devices and services transformation by bringing together the best of Microsoft. The consoles are incredible all-in-one devices with built-in services that consumers love, including Bing, Xbox Live, Internet Explorer, SkyDrive and Skype. And, just as important, Xbox Games, Xbox Video, Xbox Music and SmartGlass light up Windows PCs, tablets and phones.
Thank you, Don, for setting us on a path to completely redefine the entertainment industry. The strong leadership team at IEB and their teams are well positioned to deliver the next-generation entertainment console, as well as transformative entertainment experiences, long into the future.
1) Suggested neologism: “Mattricide: n. the killing, accidental or on purpose, of a company’s reputation by officially approved spokespersons.