Ballmer’s Exit Could Bring More Changes to Xbox One

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Published by 7 years ago , last updated 1 year ago

Posted on August 28, 2013, Phil Owen Ballmer’s Exit Could Bring More Changes to Xbox One

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Steve Ballmer, chief executive officer at Microsoft for the the past 13 years, is on his way out. A committee at the company is searching for his successor, and when one is found, Ballmer will depart.

What does Ballmer’s exit mean for Xbox? Between July’s “One Microsoft” restructuring and a new CEO, it means that the Xbox One you know now is probably going to look pretty different from the version you’ll know in a year. Three months of backpedalling on destructive policies is likely just the tip of the iceberg of change for the already-floundering new console.

That is because whoever does end up replacing Ballmer is going to try his or her damndest to lead a Microsoft that is nothing like Ballmer’s.

Ballmer’s imminent resignation must be viewed in conjunction with that of July’s corporate reorganization, which was an attempt to reintegrate Microsoft’s various divisions into a more coherent whole and also split Xbox hardware and game into a separate hierarchy from Xbox Live services. A common complaint about last month’s announcement was that a true culture change at Microsoft couldn’t occur with Ballmer remaining in charge. That may not have been a fair assertion, but it was a popular position.

The first task Ballmer undertook upon becoming president of Microsoft under Bill Gates in 1998 was to take stock of the company’s organization structure. His evaluation took most of a year, and the result was a major change: the company was split into five divisions, with each of which operating mostly autonomously with their own executives. Microsoft would maintain that structural concept until this summer, although they did move things around from time to time.

The consequence of that autonomy was a culture that allowed the Xbox division to more or less do what it wanted, and that lack of oversight and scrutiny from without worked out well for them — eventually.

“It was benign neglect,” Forrester analyst James McQuivey told The Washington Post. “That was very helpful to the Xbox team because even though you couldn’t get any credit for things in the organization…the inverse of that is that no one could come in and look into your politics.”

Though the Xbox division operated at a loss through the lifespan of the original console, the Xbox 360 has been a tremendous success. It has been the top-selling home console in North America each month for more than two years running now, and despite having next-to-no presence in Japan has maintained a slim lead on its chief rival, the PS3, in worldwide unit sales.

But as anyone who witnessed the reveal of the Xbox One and its aftermath in May and June can tell you, that success and insulation also bred some legitimate hubris within the remaining core of the Xbox team. It was the same sort of hubris that Ballmer had displayed many times over during his tenure. I’m sure we all remember this gem: “There’s no chance that the iPhone is going to get any significant market share. No chance.”

Microsoft under Ballmer took a number of steps backward thanks to that obliviousness. It took a long time for Ballmer to take Apple seriously, because he believed that building your own hardware with integrated software was a dumb idea. Meanwhile, his company, which had been riding the growth of Windows and Office for a decade, saw its influence in the desktop and mobile computing space shrink significantly. Lately they’ve been trying to play catchup with Windows Phone and Surface and touch-based desktop interfaces, and it’s not working out so well for them so far financially, even with those three things not being terrible.

Had Microsoft been better integrated, the Xbox team might have looked at that post-pride fall occurring in the neighborhood and learned something from it. But it wasn’t, and they didn’t, and so they introduced a product, the Xbox One, they considered forward-thinking but which actually turned out to carry more restrictions and requirements than even many longtime Xbox fans were going to tolerate. Years after Microsoft engineers had built a Windows Phone OS that was specifically intended to be more accessible and useful to the average consumer than Android, the Xbox team announced the least accessible home gaming console ever.

The purpose of “One Microsoft” is to prevent that sort of situation, and the separation of Xbox hardware from Xbox Live services into different divisions, while perhaps at first glance counterintuitive, will serve as another hedge against the creation of a new echo chamber.

And it would appear Xbox is in good hands these days, with Xbox Live going under the Operating Systems Group led by Terry Myerson, who begin his stint as boss of MS’s mobile efforts in 2008 by killing Windows Mobile, and Xbox hardware and Microsoft Game Studios falling under the purview of Julie Larson-Green in Devices and Studios.

Larson-Green in particular is an interesting figure. She started her career in tech support, for one thing, and she said that granted her a level of empathy that other tech-oriented folks sometimes lack (remember Adam Orth?). She also was a driving force behind Windows 7, the lone edition of Windows in the last three to perform even remotely well.

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