Could MS be getting out of the hardware business?

[michaels]

I found this on another board and all are interesting points

* Evidence of Microsoft getting out of the console business:

1. Breaking news that Bioware, a major 2nd party provider of ground breaking Western RPG's KOTOR, Jade Empire, and Mass Effect, are now purchased by EA Studios.
2. The divorce of Bungie from MS, the most important first party studio of MS's and creator of the blockbuster Halo franchise.
3. The loss of major Xbox face, Peter Moore to a third party.
4. The removal of major Xbox face, J. Allard, to a non-gaming division of MS.
5. The closing of FASA studios.
6. The early closing of the MS Sports studio.
7. The recent loss of Bizarre, the creator of exclusive titles such as Geometry Wars and Project Gotham Racing and prior to their buyout, the announcement that they would be going third party with The Club.
8. News that MS's answer to Sony's "Home" would come to PC before they would ever bring it to consoles, completely going against the Xbox-first strategy for every other LIVE initiative.
9. The $1,000,000,000 investment to cover faulty hardware.
10. The billions and billions that the console has yet to make up, even with blockbuster releases like Halo 3.
11. E3 focusing on this holiday season exclusively, with no long term big exclusives since announced.
12. The sale/shutdown of Rareware and/or Lionhead Studios... hasn't happened yet, but that will be the nail in the coffin. We probably won't hear anymore annoucements from them outside of the existing projects of Banjo and Fable 2.

 

[Queasy]

no

 

[randay]

Originally posted by: michaels
I found this on another board and all are interesting points

* Evidence of Microsoft getting out of the console business:

1. Breaking news that Bioware, a major 2nd party provider of ground breaking Western RPG's KOTOR, Jade Empire, and Mass Effect, are now purchased by EA Studios.
2. The divorce of Bungie from MS, the most important first party studio of MS's and creator of the blockbuster Halo franchise.
3. The loss of major Xbox face, Peter Moore to a third party.
4. The removal of major Xbox face, J. Allard, to a non-gaming division of MS.
5. The closing of FASA studios.
6. The early closing of the MS Sports studio.
7. The recent loss of Bizarre, the creator of exclusive titles such as Geometry Wars and Project Gotham Racing and prior to their buyout, the announcement that they would be going third party with The Club.
8. News that MS's answer to Sony's "Home" would come to PC before they would ever bring it to consoles, completely going against the Xbox-first strategy for every other LIVE initiative.
9. The $1,000,000,000 investment to cover faulty hardware.
10. The billions and billions that the console has yet to make up, even with blockbuster releases like Halo 3.
11. E3 focusing on this holiday season exclusively, with no long term big exclusives since announced.
12. The sale/shutdown of Rareware and/or Lionhead Studios... hasn't happened yet, but that will be the nail in the coffin. We probably won't hear anymore annoucements from them outside of the existing projects of Banjo and Fable 2.

damn the the depths whatever mad men thought up coffin nails.

 

[eelw]

But there is only so much loss MS can really take from their gaming division, year after year.

 

[BD2003]

I doubt theyll abandon the 360, but I wouldnt be surprised if this is the last console MS makes. So far its been nothing but an unprofitable business venture.

At the very least, the next console is going to be much more inexpensive, profitable and....reliable.

 

[herkulease]

What board did you get this from? This sounds like some moron who doesn't have a clue type this stuff up.

1. Bioware made count'em 3 games once Mass Effect released for Xbox/Xbox 360. Jade Empire ended up bombing. Critics liked it people didn't buy much. KOTOR had about 2 mil in sales. Microsoft still owns publishing rights to Mass Effect. Bioware only believed they'd make sequels. But if the game didn't sell sequels are pointless.

2. It's more or less a spinoff. Microsoft had two options spin them off and have 1st rights or refuse and let the employees run off and own the shell of bungie name.

3. Peter Moore can be replaced.

4. J Allard went to work on the Zune. There's no real "gaming" division for Microsoft per se. the Zune is finished now, its time for revisions Do people think they just pay him to sit at his desk and stare at the wall. He's doing something. Just they don't tell you what's him or any other person is doing doesn't mean the end.

5. They hardly made that many games. No big deal.

6. XSN sports announced its closure back in 2004.

7. Like #1, microsoft never really owned them. Consider it more or less paid exclusives.

8. Okay I just read it. Its pretty easy to explain why a social network would start on the PC. Windows. Microsoft's dominance makes it so much easier for people to get hooked. Once you get them hooked on their PCs be easier to move it over to the xbox.

9. 1 Billion is a drop in the bucket. They wasted billions in the late 90s/early 2000 on webtv, ultimate tv and others.

10. If you lost a few billion dollars over the last 5-6 years. How can you possibly make up the money in 2 weeks time short of some pork barrel that someone slipped through? Refer back to #9.

11. Why do they need to rush and announce stuff for the the following year? When even they don't know for sure yet when stuff comes out.

12. Rare is shell of its former self. Many original members have left. Lionhead studios I don't follow much on them.

I'm surprised Bill Gates retiring from Microsoft wasn't listed as a reason.

 

[Schadenfroh]

Originally posted by: randay
damn the the depths whatever mad men thought up coffin nails.

The thousands that come to my funeral (to make sure I am dead, not to mourn) will just weld my all steel coffin shut and pour concrete over it. No nails needed!

But there is only so much loss MS can really take from their gaming division, year after year.

They have spent all of this money to get a new product line / brand out there door. I think it is time for a new strategy rather than a pullout (and everything be for nothing), or maybe a sale of the division to a third party?

 

[darkswordsman17]

The Xbox has been much more than just a gaming console. They used it to test features that they wanted to put into Windows (Live was basically Microsoft checking out VoIP).

I don't see them abandoning hardware anytime soon as if nothing else it gives them a nice hub in people's home entertainment centers (and they want control so that they can dictate copy protection to appease the media companies, much the same way that Apple does with the iPhone/iPod). In fact if anything, I think they're going to become even more focused on the hardware (they set up a division to design their own components such as processors). They've said on multiple occasions that they're already working out the details of of the 3rd gen Xbox. I'm not saying its not possible for them to leave it (as software has been their strong suit), but there's a lot of positives to it, and a lot of it has not really even gotten off the ground (they want Live to become a major network that spans all your devices and IPTV has the possibility to be big). Also, as we slowly move more into the digital distribution model for media, the 360 can only improve. I think this latter part is what Microsoft has been gambling big on and why they are adamant about hi-def optical drives being an option only. We might see a big move on this front when the Zune 2.0 software comes out in November.

I personally don't really know where people are getting all their doom and gloom from. The way people talk, its like the PS3 and 360 are ready to bankrupt Sony and Microsoft. I think too many people are looking at the market wrong, they're directly comparing Microsoft and Sony with Nintendo when I don't really see them directly competing (and I don't think either company looks at it that way either). The overall gaming market is still growing substantially, and all three companies are benefiting (and will in the long run). Its still fairly early in the life of the PS3 and even the 360 to say what the future holds. I think Sony really is aiming at the PS3 to have a longer lifetime than consoles in the past, and so it might not hit its stride for another 2-3 years. Once the 360 and PS3 hit $200 is when they will really gain in the mass market. Remember, people still have not adopted HDTVs at a huge rate, so quite a few people might be holding off until then (with the way Sony and Microsoft marketed their systems they've led the consumer to believe that they only way to take advantage of them is to have an HDTV).

Something else that bothers me is how everyone now is suddenly an analyst. Yes, I'm being hypocritical here as I'm doing the same thing, but there's too many people who have very limited understanding of business models and synergy in corporations and a lot of other things that help with understanding Microsoft and Sony and their approach to their systems. The worst part is that these people really aren't any worse than the actual analysts who get paid to do that.