Should MS 'Spin Off' the xbox brand?

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It's already somewhat happening with the Games for Windows scheme. Many of the ideas and lessons Microsoft learnt from the gaming division, they are starting to implement into other areas.
 
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But the thing is though, have the 360 sales really stalled? They have only sold a little over million units this year (looking at the Q1 and Q2 on Wikipedia), have they actually outsold the PS3 in the year 2007? And also with the Wii almost selling as many as the 360 in 7 months as it done in over a year.
Add to that they are losing about 280 million a quarter, in a bid to make a profit in 2008, but with the Billion dollar repair bill, that is gonna push that back another year. With Vista staring a service pack (Six months into its life) in the face, and google doing well with their online office, it may make sense for MS to stick the home entertainment division out on its own.

I think it is a serious cause for debate. Taking the whole gaming side out of this and looking at it more business like, i honestly think MS will be considering the future of the xbox brand. I think this time next year we will hear big news, either no more xbox's or the 720 with a launch window announced.
 
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Microsoft have been sneaky, (well clever i mean) with that 1 billion + bill. They've somehow or other put it into 2007 results ending june 30th. This means it will be HUGE loss for 2007 for the gaming division, leaving it clear for 2008 to try and make a profit.
 
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KNiVES said:
It's already somewhat happening with the Games for Windows scheme. Many of the ideas and lessons Microsoft learnt from the gaming division, they are starting to implement into other areas.
Haven't watched the video but I'm assuming that's not how they meant spin-off. I think they mean it in the sense that they would separate Xbox from Microsoft and make is a 'spin-off' company.
 
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cheets64 said:
The next "xbox" which should be out in the next few years will more than likely wont be called a "xbox"

you reckon ... i would have though that it would be at least pretty heavily linked just simply for brand loyalty. Im sure when MS released the first xbox they werent expecting to crush the playstation merely set up a base for the 360 and for people to be drawn towards there brand
 
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If I was them i'd wind the whole division up. Sack the designers of the 360 and cut my loses. It clearly isn't selling now, the wii will overtake it in the next 6 months.

They blew it with reliability. No doubt they wouldve cut the price earlier if they didnt have to swallow the cost of repair.

I doubt we will see another MS console. Why bother, they dont make money.
 
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JUMPURS said:
I think it is a serious cause for debate. Taking the whole gaming side out of this and looking at it more business like, i honestly think MS will be considering the future of the xbox brand. I think this time next year we will hear big news, either no more xbox's or the 720 with a launch window announced.

As msmalls74 has said MS have been clever and by allocating the capital to fix the RROD in the 2007 results, so they're almost guaranteed a profitable 2008.

I read an interesting article about the 65nm revision coming this fall. (http://blogs.mercurynews.com/aei/2007/07/microsofts_next_move_code-name_falcon.html) Code named 'Falcon' it could reduce the hardware costs considerably and allow MS the liberty to play around with size / heat and even putting the power brick internal.

MS are over the 'worst' of it and should have a few years of profitability with the 360. The capital investment payed out for studios (Lionhead, Rare etc), hardware development and the repair costs has been spent. Why would XBox disappear just as they start to make money? It makes no sense.

Sony lost $265m over laptop batteries and I can't remember the same furor that they should leave the battery market...
 
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smcshaw said:
As msmalls74 has said MS have been clever and by allocating the capital to fix the RROD in the 2007 results, so they're almost guaranteed a profitable 2008.

I read an interesting article about the 65nm revision coming this fall. (http://blogs.mercurynews.com/aei/2007/07/microsofts_next_move_code-name_falcon.html) Code named 'Falcon' it could reduce the hardware costs considerably and allow MS the liberty to play around with size / heat and even putting the power brick internal.

MS are over the 'worst' of it and should have a few years of profitability with the 360. The capital investment payed out for studios (Lionhead, Rare etc), hardware development and the repair costs has been spent. Why would XBox disappear just as they start to make money? It makes no sense.

Sony lost $265m over laptop batteries and I can't remember the same furor that they should leave the battery market...
Define 'profitability' and 'making money'? At what point will MS have recouped their outlay on the Xbox project? Surely not until they have done so and exceeded it can those terms be used. A paper profit in a given financial year is not the same thing.
 
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dirtydog said:
Define 'profitability' and 'making money'? At what point will MS have recouped their outlay on the Xbox project? Surely not until they have done so and exceeded it can those terms be used. A paper profit in a given financial year is not the same thing.

I agree that the $6b outlay won't be recouped any time soon but let's put it in a wider context.

http://www.abcmoney.co.uk/news/08200799293.htm

MS just spent $6b buying aQuantive, an advertising company and this outlay isn't going to be returned any time soon. MS is looking for very long term investments.

They obviously see a time where theres a IPTV box sat under most TVs in the US and they want a piece of this pie. I'm sure they see the $6b 2001-2007 capital investment in the same way they see the aQuantive one.

As with the aQuantive investment we would need define profitability by looking at the total lifetime returns on the investment rather than base it on a 'paper' year on year figure.
 
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The problem is though, will they start making money next year?
In january they said they would have shifted 13-15 million units by June, then promptly slashed that to 'maybe it will be 12 million by June' If they don't start shifting the units in large quantities again then they may struggle. Halo 3 will give them a bit of a boost, but i think that the people who are desperate for Halo 3, will already own an xbox.
MS wont be able to keep spending money hand over fist, like they done with GTA IV.
I think it is cause for concern, especially with the Zune not making a dent in a market, i dont the next release will do much either, with it only being an 80GB! what is that all about?
 
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JUMPURS said:
The problem is though, will they start making money next year?
In january they said they would have shifted 13-15 million units by June, then promptly slashed that to 'maybe it will be 12 million by June' If they don't start shifting the units in large quantities again then they may struggle. Halo 3 will give them a bit of a boost, but i think that the people who are desperate for Halo 3, will already own an xbox.
MS wont be able to keep spending money hand over fist, like they done with GTA IV.
I think it is cause for concern, especially with the Zune not making a dent in a market, i dont the next release will do much either, with it only being an 80GB! what is that all about?

They didnt reach the 12million (shipped not sold) as well only 400k short but when like you said its already been lowered by 1-3 million units not ideal. I think in late 2007 early 2008 the PS3 will start gaining a lot more momentum and this wont be great for Microsoft as the Wii will still keep selling on its "fun" factor and low price. If there is a price drop this for the 360 I think it will happen when the "falcon" hardware is released one bit of advice for Microsoft Test, Test and Retest, (they know this already) but the worst thing for them would be to rush out the cheaper hardware just to make a small profit in 2008 but be left with another legacy of faulty hardware.
Microsoft need to be part of the gaming industry they've shaken up Sony and Nintendo into doing things different, there would be no Home or PSN if there was no Xbox live no Killzone, RFOM if there was no Halo. As a gamer first and a Sony Fan second there is a need for Microsoft to still be in the market, changing the Xbox franchise would just be silly. Id say 15 years ago people associated Sony with Walkman, now its Playstation. Who knows 10 years down the line instead of Windows it will be Xbox for Microsoft.
 
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M$ should stick to software imo - its how they made their name and if they lose focus on that then they're gonna find themselves losing market share to open source OSes and office suites.
 
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dannyjo22 said:
If I was them i'd wind the whole division up. Sack the designers of the 360 and cut my loses. It clearly isn't selling now, the wii will overtake it in the next 6 months.

They blew it with reliability. No doubt they wouldve cut the price earlier if they didnt have to swallow the cost of repair.

I doubt we will see another MS console. Why bother, they dont make money.

I hope your wrong.

I love the Xbox brand.
 
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scorza said:
M$ should stick to software imo - its how they made their name and if they lose focus on that then they're gonna find themselves losing market share to open source OSes and office suites.

I dont think they'll lose focus its not like they are allocating staff from there software teams under the xbox program - they run seperately so will have no adverse effect on that side of things
 
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McDaniel said:
I hope your wrong.

I love the Xbox brand.

I like mine too, but it's always been assumed that this gen was about consolidating their position for dominance with the next gen. If anything they have gone backwards. The repair fiasco and relibilty issues mean even in the next gen they will be lucky to pull back.

I can honestly see the 360 ending up at the bottom of the pile sales wise. They shouldve been in a position when the PS3 was launched in europe to be able to knock £100 off a premium and steal the whole market. They couldnt do that because they know how much the repairs are costing them.

So the console is still quite highly priced for something you expect to break.

They will never make back the money they have thus far invested in the 360, so why bother losing money into the next gen?

I dont think there will be a xbox 720 or whatever it's called. Of course they won't let that out of the bag and play at making people think there will be another to carry on selling the 360. Much like when people where buying the dreamcast they didnt expect it to be the last sega machine.

Sure MS are way bigger with huge profits but the strategy has been put back years with the 360 and even huge companies wont put up with that forever.
 
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sure the reliability issues have stopped buying them but i dont think thats why the Wii is catching up. Just because its something new and different and also the price. Mate who works for a game retailing store is still amazed by the amount of people who buy DS' for example and they only just have Wii stock in NOW. Personally I think the 360 will beat the PS3 one thing alone just for price. Tho we see PS3 having a price drop but the xbox might be able to follow suit i don't know of there potential for that
 
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McDaniel said:
I dont think they'll lose focus its not like they are allocating staff from there software teams under the xbox program - they run seperately so will have no adverse effect on that side of things

Yeah, but Google are taking huge chunks of revenue out of MS with search engine revenue and office revenue, you also have open office, linux etc to contend with.

I think the point he is making is, they can't afford to throw money down the drain in this manner when they are taking some serious competition in their main areas of income. Not that they have staff and physical resources allocated where they shouldn't be, but they have loads of money being wasted and too busy looking at the wrong market for them.

Sure MS have loads of money, but they make 13 Billion a year, and the repair costs (no matter what year it went into) was a Billion. That is almost 10% of your overall profit gone, by a department that already costs a billion a year anyway. Add to that however much money they are chucking at devs, like the 50 million to rockstar, i think the division will be looked at quite seriously.
 
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