Eliminate Xbox One, Bing And Surface, Says Microsoft Investors

Microsoft shareholders see the Xbox brand as "non-essential."

on February 11 2014 2:31 PM
xbox
Will Microsoft eliminate the Xbox brand? Courtesy/Microsoft

On Feb. 4, Microsoft appointed 46-year-old Satya Nadella to the coveted position of CEO. The multimedia giant hopes Nadella will lead company efforts to unify practices and products across the brand’s software, services and hardware divisions. Recently, a number of Microsoft investors told the new CEO and the company's board of directors that they should cancel endeavors like the Xbox One next-gen gaming console, search engine Bing and the Surface tablet.

“Microsoft's Windows division has been facing shrinking profits; last year, the unit pulled in a net $9.5 billion, down from $11.6 billion in 2012 and $12.3 billion in 2011,” said the Washington Post. “Company filings suggest that the drop is largely attributable to declining demand for Windows among consumers, even as sales of Windows to businesses remain strong. The same division also reported a $900 million loss on unsold Surface tablets. The online services division, which oversees search engine Bing, reported a loss of $1.3 billion in 2013 -- less than the previous year but still in the red.”

Two shareholders have been pushing for the Redmond, Wash.-based conglomerate to leave behind “non-essential” product lines so Microsoft can readily focus on its primary source of income -- selling software to businesses.

Last November, CEO hopeful Stephen Elop, a former Nokia CEO, was rumored to believe the Xbox brand should be cut loose as well. Although the Xbox 360 is considered to be one of the most popular video game consoles of all time, Elop may view the brand as unprofitable. Bloomberg’s inside sources reported that Elop “would also consider selling healthy businesses such as the Xbox game console if he determined they weren’t critical to the company’s strategy.” During ex-Microsoft CEO Steve Ballmer’s last shareholder address on Nov. 19 last year, he called the Xbox brand a “reflection of what is possible when a company, our company, is united under a common vision.”

“Some investors have suggested that Microsoft spin off its money-losing consumer products and focus solely on the enterprise,” stated the Washington Post. "Even the Xbox deserves to go," Paul Ghaffari, the wealth manager for Microsoft co-founder Paul Allen, said in 2013.

What could this mean for Xbox fans? Eliminating the gaming brand has been proposed to Microsoft ever since the company’s business-oriented products reached high sales while customer-focused endeavors outside of Windows and Office saw a halt in sales. Without Bing, the Xbox and the Surface, Microsoft wouldn’t have to continue to spend billions of dollars on research and development.

Do you think Microsoft will eventually eliminate the Xbox brand? Leave a comment below or Tweet me!

More News from IBT MEDIA