Microsoft Investor Wants To Fire Ballmer And Sell Xbox Division

/ 6 years ago


A report by BizJournals claims that ValueAct, a $2 billion Microsoft investor with a 1% stake in the company, is seeking to achieve some major changes at Microsoft. Long-term Microsoft analyst Rick Sherlund claims that big changes are going to take place very soon as other Microsoft shareholders support the decision to get rid of Steve Ballmer – in addition to the investment group ValueAct. According to the report ValueAct are seeking to replace Steve Ballmer because his strategy “inspires little confidence” in shareholders.

Apparently Microsoft has no choice but to give ValueAct a seat on the board otherwise they may launch a “public war” on Steve Ballmer and Microsoft which could end with serious turmoil at Microsoft.

“A decision by the board at Microsoft to offer a nomination for a board seat could keep the activist agenda behind closed doors and take longer for shareholders to see potential benefits” stated Sherlund.

Furthermore, it is believed they might target the Xbox division and try and get rid of it altogether. This would allow Microsoft to focus on other products and mainly Windows.

“Xbox is cool, but by our estimates Microsoft has not made money at this” believes Rick Sherlund.

Image courtesy of The Next Web

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80 Responses to “Microsoft Investor Wants To Fire Ballmer And Sell Xbox Division”
  1. Alistair Hardy says:

    Microsoft doesn’t make money from xbox? it’s fundamental to the game plan!
    With PC’s in decline and Windows 8 in shambles, Xbox has the potential to be the firms saving grace providing they don’t have the ring of death issues with it.
    If it does get sold, i bet you one of the companies that this ValueAct company has a large share in.

    • Wayne says:

      Believe it or not but consoles aren’t the massive money spinning, huge profit making commodity most people perceive it to be.

      • Alistair Hardy says:

        I disagree. They will sell the hardware at cost for the first 6 months before lowing the cost slightly, the surrounding stuff is a huge money spin.
        $60 a year to play online (%99 of people will pay that)
        so if they sell 1,000,000 units, they’ll be on $59,400,000 for that a lone
        then the new store will have a lot of marketing to get the headliners to the front and the cut from all digital sales (%10 – %20 at an estimate).
        and i suspect they will sell a metric [email protected]% tonne more than 1M units

        • Wayne says:

          You misunderstood me. They make money of course they do otherwise they wouldn’t be in it. I was alluding to the consoles themselves not being big cash cows but their other sidelines are.

        • anonymous says:

          what if those 3 billion dollars losses are after including those gains from online?

      • Josh Klint says:

        Consoles account for a low portion of MS revenue, something like 5%. The big earners are Office, Server, and Windows, split about a third each way.

  2. Stephen Lynx says:

    Oh my god, yes, obviously not making money is all a cunning plan for a multi bilionaire corporation.

  3. W.T Snacks says:

    Let it happen so video games could go back to being video games and not business. Let Sony and Nintendo bring back the golden age.

    • NickVancouver says:

      You think Sony and Nintendo make games/hardware for fun? Of course not, they make them for money. Suggesting otherwise is idiotic.

    • Markus Hudobnik says:

      All three of the companies do it for money. They don’t do it for fun. I mean come on. Get a grip. Microsfot has shown some great improvements this generation (after the DRM stuff). If you are too blind to that you need to not be sharing your thoughts with anyone.

    • Demetre HG says:

      STFU you Sony sheep

      • Matt says:

        Lol… Sony vs Nintendo (pre-gamcube and PS2) were the golden days. Microsoft hasn’t done anything but introduce a subscription model for features that are free on PC… Oh, and Halo. People have fallen into thinking it’s acceptable to hide a portion of the game behind a subscription fee so Sony is following suite while all I can do is laugh while I play 64 player dedicated servers on PC without the need for a subscription.

        • Aidan Warner says:

          You need to pay for the internet no matter what platform is it on. Microsoft just don’t have enough money to host internet servers for their games for free. Sony only have the money because they don’t focus on a limited group of technology. Even now, your have to pay a subscription for the PS4.

          • Matt says:

            Paying your ISP for internet is completely different than paying microsoft to access your internet…

            “Microsoft just don’t have enough money to host internet servers for their games for free”

            “Microsoft just reported its Q4 2013 earnings, and the Redmond behemoth
            has found itself with $19.90 billion in revenue, $6.07 billion in
            operating income, and $4.97 billion in net income.”

            This is from a quick google search for “Microsoft 2013 earnings”

            That’s with them claiming that the PC market was “crashing” due to the poor reception of Win 8. So even with that they would have enough money to host a server farm for XBL without it even making a dent but all the execs pay themselves outrageous amounts so you’ll never see the benefit. Sony is just as guilty and I’m not sticking up for either side… I’m stuck using a windows OS until gaming opens up on PC.

    • guest says:

      Sony… the company that tried to sell us the $599 PS3… that told us to work harder so that we could afford it.

    • Jesse says:

      nintendo? They cant even come up with an up to date console. every console they sell looks a generation behind. People are harping on MS for the kinect, when the kinect is better than anything nintendo or sony could come up with.

      • Mohammad Jafri says:

        See John carmack’s comments on the Kinect. He has real experience in the gaming and tech industries. BTW, I hope you realize that your earlier argument is invalid as the XBOX1 and the PS4 are the equivalent of a low end gaming pc

  4. Anon says:

    It’s about time. So many, many investors and consumers are fed up with Microsoft and their unacceptable and poor decisions; anti-consumerism, anti-privacy, personal information sharing, invasive NSA collaborations, and continued effort to undermine the game industry’s natural progression by grossly pushing unwanted, invasive, and cash-hog products into the market.

  5. mike says:

    die, microsoft, die. Just let Sony and Nintendo make us dream,with great games.
    You were worse than aids. You fooled people with the rrod, aided by the payed US press. 30 million gamers had to pay 60 bucks a year, during 8 years, for accessing the online features of the game they already payed full price.
    All you did for gamers was securing shitty cod dlcs, halo/gears/forza games, and buying press, journalists, developers so they make crappy ps3 versions, and so journalists/ websites just praise the xbox, and crap over Sony/ps3.

    You almost killed the whole gaming industry, with the worst anti consumer policies ever made. You treated gamers like shit, like fat walking wallets. We’re not servers, or office licenses. We are humans. You can go fuck yourself, you and your fat ugly shareholders. With all the xbox one policies, people really learned you represent the devil, on planet earth. You deserve a full size Boeing 777 on your HQ. Just let us play and enjoy games, and let Sony and Nintendo make great games for all of us.
    Just stop killing the games industry, and go back to you office/windows licenses.
    And for those who still don’t believe they’ve been raped by you, well, now, it’s official. The killer instinct presentation, with the rape joke ‘just let it happen, it will be over soon’ is the proof you have been raping people’s asses and wallets.

    Seriously, microsoft, just die. Nobody needs you. Gamers don’t need you. All the recent flip flop won’t make people forget what they were going to swallow. You can dress your white Angel dress, but people know you are the devil. Even in NA extreme xbox fans just left the matrix , and no longer are indoctrinated. And they will buy a ps4, instead of the pay wall xbox one.

    Once again, quit games, and go rape someone else. Shame on you, microsoft. You had the money, you had everything. But just like money can’t buy love, money can’t buy people trust. You’re over. Game over.

    Before dying, just release all your indoctrinated fanboys, so they see the light. At least, do that . Don’t forget. God is always watching us. And if you were bad, you will pay for it.

    • Jack says:

      Seriously dude…

      I’d love to see the world from your perspective of pure evil vs pure good, however the world is just shades of gray.

      Nintendo cant grow and change and are struggling now because of that. People complain about sequels and how Call of Duty and Madden have a new game every year, while Nintendo has used the same franchises year after year and month after month since 1983. They literally have no Indie developer support or third party support and continually refuse to think that the world of video games are changing, denying that video games can be art. They also regularly disallow its community members and fans to freely put its gaming content on video sharing sites like YouTube.

      Sony doesn’t make video games or software, they make hardware. I suppose you forgot what it was like seven years ago when Sony wanted to force gamers to pay $600 USD for a console, and how two years ago because of their cheap online service and low security restraints they lost 77 million users personal info and some users credit card info to hackers, and the service was offline for one month denying use of some of the games and applications its users had paid for. They lied to their customers for several weeks downplaying the severity of the data loss until they were forced to come clean, spurning an inquiry from the US House of Representatives, the British Information Commissioners Office, and the Canadian Privacy Commission.

      Microsoft wanted to push an unrealistic outlook and requirement for their newest console. They wanted to restrict consumers into having to sign in every 24 hours keeping us on a leash. Their requirements meant many of their consumers wouldn’t even be able to use the console. Members of the military, people who lived in rural areas, and people in countries that didn’t have great broadband support wouldn’t be able to use the console at all rendering it useless. In the past they rushed the development and testing of the XBOX 360 which resulted in many of its systems failing early in their life cycles for various reasons, costing gamers either money and time to replace their consoles or have them repaired.

      All three companies have made poor and positive decisions, but the fact that all three exist and are constantly competing means nothing but good things for gamers.

    • Alex Fiedler says:

      This entire comment is just sad. You’ve anthropomorphized a large corporation and you’re leveling a very concerning amount of hate against it; it’s definitely not healthy. You need to seek professional help, seriously.

      • mike says:

        Try to cross the Atlantic, and take a look at your wonderland , from a different angle and perspective, if possible, without the illusional lenses: you may discover not everything you accept is good for the rest of the world. And I’m not the one who needs professional help, I’m really fine, and i can perfectly analyse, judge and accept or not whatever I don’t think it fits me.thank you for worrying about my health.

    • Klimax says:

      Just a little reminder. Sony was the corporation who tried to sell us rootkitted discs and removed quite few features from PS3 midway.
      Sony is no better then Microsoft (at best).

      • Mohammad Jafri says:

        Sony relies more on its gaming decision and so treads more carefully. They were filled with pride after the IMMENSE success of the PS2 and thought they could get away with it with the PS3. They didnt make that mistake again

    • ►Julie◄ ♪ says:

      Since when has any corporation in the gaming industry ever cared about “pleasing gamers”? Whether it’s Microsoft, Sony, or Nintendo. At the end of the day all they care about is getting your money so they can make a living. Get back to reality.

      • Mohammad Jafri says:

        See my comment below. Plus Nintendo relies solely on gaming, and so as to tread even more carefully. And I would argue alot of the people like Miyamoto etc. actually do care about gamers

    • MRman says:

      PS4 will also let u pay for internet and xbox1 policies have been cancelled and nitendo is for kids and nitendo did not improve at all graphic wise

      • Ki EuKiTo says:

        Nintendo has innovated in so many ways, it is crazy. You should be ashamed for being so ignorant & thinking that only graphics matter. You have no idea how IGNORANT you are as to just what a huge role Nintendo played, years ago to lay the foundation for the graphics you see today.

      • Mohammad Jafri says:

        GRAPHICS WHORE. Your fucking easy ass 200 fps woudnt exist without nintendo: the guuys who revitalized gaming in 1983, made some of the best franchises in gaming, made portable gaming, the d-pad, the analog stick, rumble, 3d gaming, 4 controllers, how to transition from 2d to 3d (mario 64), ocarina of time’s lock on system (and it being the HIGHEST rated game EVER with a 99% average)

        And if you think they are kiddy, play the legend of zelda majoras mask, or the final boss of Earthbound, or the NES catalog of games with the hard as shit games (Nintendo hard is a term for a reason), or any F-Zero games, or Mario lost levels, or Eternal Darkness, or Xenoblade chronicles, or Sin & Punishment Star Successor on the WII!!, or ANY of the AMAZING systems they made

  6. JuanCabrera says:

    If Microsoft does sell the Xbox division, Sony should buy them. Imagine a console where the hardware is put together by Sony and the software and GUI is done by the Xbox team. It would be a match made in heaven!

    • slims_post says:

      Yeah because the world really needs another monopoly, anyway Sony’s Playstation Division lost even more money that Xbox did this generation and have been selling off assets like crazy, if it wasn’t for the weak Yen things would look worse for them, they couldn’t buy Xbox and it’s not going to be for sale anyway. Keep dreaming fanboys.

      • Ki EuKiTo says:

        There would still be Nintendo. And who knows, perhaps another player would enter the fray. There is still the possibility of Apple or Android. Apple already made an attempt in the 90’s. Also, there is the distant chance (however unlikely) that a company like Ouya could gain some ground. Indies & open source are catching on big in the mainstream.

        • Bat Tom says:

          Picture (if you will): A world in which Rare is owned by Nintendo.

          Goldeneye, Perfect Dark, and Conker’s Bad Fur day on Virtual Consoles everywhere

          Banjo Three-ie

          Donkey Kong Country Returns… To Rare where it belongs

          • Mohammad Jafri says:

            Ahem. Nintendo owning Rare ips. All of rare’s talent left. They could hire all the ex-rare talented employees. But Retro has made great DKCR games.

            Oh, and dont forget battletoads or jet force gemini

  7. Josh Klint says:

    Microsoft in collusion with Intel held gaming back a decade. Games used to get better graphics and physics every 1-2 years. By selling console hardware at a loss and refusing to enforce any standards on PC graphics hardware Microsoft destroyed PC gaming.

    At the same time, they refused to implement a good permissions and installation scheme, and effectively killed desktop software. Software didn’t move to the web because it’s a better platform, it moved to the web because consumers are too scared to install an executable and investors are afraid MS will start making a shitty free version of any successful desktop software.

  8. Christian Ney says:

    Good idea, leave Sony alone in the market…

  9. hammerclaw says:

    If someone with a one percent stake in Sony’s game division were to suggest the same thing, you Sony fan boys would laugh them to scorn. Yet Sony is the company seriously considering selling off divisions, after hemmoraging money for several years. Get a life, you pathetic twits.

  10. Loghorn says:

    I wonder what Xbox fanboys are going to do when Microsoft announces that they’re shutting down their gaming division? They’ll have no choice but to turn towards Nintendo’s consoles, Sony’s consoles, & PC’s if they want to play future games, just like Sega fanboys had no choice but to turn towards Nintendo’s consoles, Sony’s consoles, Microsoft’s consoles, & PC’s for future games after Sega announced that they were discontinuing Dreamcast & are shutting down their gaming division.

  11. HH KiLLaMaNiLLa says:

    this is 1% and this douchebag isn’t gonna convince anyone to shut down microsofts main money maker you kidding me microsoft has the best selling console of this generation they won’t be shutting shit down if anything they will buy that douche out and tell him to f**k off.

    • Bat Tom says:

      >best selling console of this generation
      You spelled “Nintendo Wii” and “Nintendo 3DS” wrong. Give it a few months and you’ll be spelling “Playstation 4” wrong, too.

      • Mohammad Jafri says:

        And Nintendo DS. Dont forget the 2nd or 1st (vgchartz=unreliable) most popular console of all time. But the NES, if gaming had the same audience, would probably have something like 250 million+ people playing it. Watch him reply calling the consoles kiddy

    • Kasper Kooistra says:

      1% is pretty huge by the way

    • Trixie says:

      Main money maker? That’s Windows, child. Xbox loses money by the truckload. Best selling console? It was dead last.

  12. Jack says:

    I wonder if this is why they are reorganizing the company. If they have separate departments, they can more easily identify who is making money and who is costing them money. The divisions now stand on their own, so it is up to each division to show if they can perform or not. If the Xbox division can’t hold it’s own, we may see a slimmer organization, but I cannot see them cutting Xbox loose.

  13. Mohammad Jafri says:

    I dont like Microsoft gaming division (they can rot in hell for all I care), but although the orignal XBOX was a commercial failure, the XBOX360 was immensely poplar in the US and did decently in Europe. Microsft gaming division has posted multiple consecutive profits the past few years

  14. John Marcus says:

    If the Xbox dies expect a massive drop in quality when it comes to the PlayStation.No competition means no incentive to try hard.

  15. raphael says:

    I could well see xbox and playstation leave the console market after the 8th generation and become something like cable services because they almost dont make money due to their high development costs ! Nintendo has always kept their development cost low and thats why they are able to turn each year into profits(except last year-first time in 25 years) they’re never rushing the latest technologies because it costs a lot of money !

  16. gfhgfhgf says:

    1 have not reinvested anyears and year and years…MS is and will tell them to fuck off.and dont be suprised if you see a buy back just to shut the activist up……these type of investor groups have bee around for a lil while now trying to fuck shit up inside companys .

    • Tony Gilliam says:

      Yea that would be a dumb-ass move to sell something as monumental as Microsoft. This mite not even be true people can’t believe everything they see on the internet. If it is somebody needs to lay of the drugs.

  17. tommy444 says:

    now sony is going out of business in 2 years and this ……so it looks like the Wii u will be champ…..which is great since they are coming out with great games and working now with third party…..

    • V8Supercar1 says:

      Nah. If Sony went bankrupt. Playstation would become its own company. Its already its own brand and making its own money. But the reason why microsoft hasn’t made money off the xbox because of all their unnecessary spending. Wasting money of timed exclusive dlc and other timed exclusives. Not to mention constant warranty repairs due to their rrod fiasco.

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