Investors Want Microsoft’s New CEO To Kill XboxFebruary 10, 2014
Satya Nadella is still just learning the ropes as Microsoft’s new CEO, but he’s already got some pretty serious decisions to make. Two influential stockholders are pushing for the Redmond company to drop what they believe are “non-essential” consumer product lines – among them Bing, Surface and Xbox. These investors would prefer that Microsoft focus on what’s always been their bread and butter: selling software to businesses.
If Nadella were to listen to these stockholders and abandon these consumer products, it would definitely create some tension, as these product lines are the works of his predecessors Bill Gates and Steve Ballmer. Nadella is a 22 -year veteran of Microsoft, and owes much of his success to the two. Microsoft’s Windows division has recently seen reduced profits – last year’s net for them was $9.5 billion, which is down from $11.6 billion in 2012 and $12.3 billion in 2011. With a $900 million loss on unsold Surface tablets and a $1.3 billion loss in the online services division – which Bing is a part of – it’s easy to see why investors are concerned.
While Xbox is probably doing the best out of the three products, it’s no secret that Sony’s rival PlayStation 4 has greatly outsold the new Xbox One – mostly due to a heftier price tag on the Xbox One and a horribly botched unveiling. Ever since the initial announcement, in which the public first learned of plans for draconian DRM, a terrible used games policy, and a focus more on social media and TV than games, it’s been an uphill battle in the Xbox One’s PR department. They’ve since dropped all of the DRM (after Sony destroyed them with their PlayStation 4 unveiling), but a lot of gamers still feel slighted. After all, if there was no competition from Sony, that terrible DRM would have made in into the final retail units.
Time will tell if the Xbox survives the new CEO’s reign, but it seems more likely that the Surface and Bing are on the chopping block first.