What does Stephen Elop mean for XBOX?

The big news in executive shake ups last week is the announcement that Stephen Elop—former CEO of Nokia—will now be taking the role of head for the Devices & Studios division, the portion of the company that handles videogames. In other words, the former head of Nokia is now in charge of the fortunes of the Xbox One and Xbox 360. This is a division that’s changed hands a lot over the years, with the dramatic and surprise departure of Don Mattrick last year, to be replaced by Julie Larson-Green who is now moving over to the “My Life & Work” team as Chief Experience Officer.

So what does this mean for the future of the Xbox One?

[fr0sty]

Change the first letter of his last name to an "F" and you'll have your answer.

[StealthPandemic]

Why?

[Remy_S]

Because he's the reason why Nokia is in such bad shape.

[fr0sty]

Microsoft sent him in to kill Nokia so their share prices would plummet and MS would be able to swoop in and buy them out cheap.

Both Elop and the new CEO of Microsoft have expressed a willingness to sell the Xbox brand.

@ Baka-akaB, don't forget that he originally worked at MS before he went to Nokia, destroyed them, and then was re-hired back at MS after MS bought Nokia.

[Baka-akaB]

Because , irrevelant to any ill or good feeling toward MS and or the Xbox , the guy is a very bad CEO . He turned a ship that was in trouble but yet very profitable in a few sectors , into a fast sinking ship . Then he sold it off , and parachuted himself at Microsoft with a big fat bonus check he certainly didnt deserve .

Of course some hoping he actully got stills , are saying he was just sent to Nokia all along to facilitate the purchase by MS , but let's leave that to soaps like Dallas .

And then of course , there is the matter of him having shown no love toward the Xbox part of the firm

@frosty

i'm not denying it being true , nor inclined to believe it . True or not , MS would have no qualm hiring back the guy that ultimately made the purchase possible and had a good run in their offices .

I just know that his short tenure as Macromedia CEO wasnt good either . And he ran away selling It to Adobe too . Are people going to say microsoft sent him there too ? He was successful at MS , relatively with Office , but hasnt shown yet he is a good CEO .

I feel its just his schtick , when all fails , sell everything for profit

[fr0sty]

I'm actually hoping they do sell the Xbox brand... Amazon is trying to get into the business, and I think that merging Amazon Prime into Xbox Live would be awesome. Free 2 days shipping on Amazon, access to Amazon Instant video, and all of Xbox Live's features rolled into one service.

I'd buy that, especially if they released a new console that had the horsepower to justify its price tag.

[Anon1974]

In addition to what fr0sty said, today Microsoft also officially appointed Mason Morfit to the MS board of directors. Mason Morfit is the head of ValueAct, a group of "investor activists" who own billions worth of Microsoft. By far, institutional investors combined own the vast majority of Microsoft as a company, and ValueAct has been very vocal in their wishes to see see the Xbox division either spun off or sold off. You can bet the other institutional investors don't hold any special affinity towards the Xbox. Even though it's profitable overall, the Xbox division's return on investment is paltry compared to other divisions within Microsoft.

If the institutions want to sell off the Xbox Division, even Gates and Ballmer themselves don't own enough of the company to stop them, even if they wanted to, with each holding less than 5%. We don't know if there's any truth to the rumors that MS has already begun negotiations with Amazon for the Xbox brand, but we do know that ValueAct and other investors have been publicly calling for the division to be sold off.

And of course MS will deny any such thing is in the works, until it's a done deal.

[fr0sty]

What gets me are those who would disagree that an Amazon Xbox would be an awesome combo of services and would be a great fresh start for the Xbox brand as a whole. Amazon has their own cloud service already, their own streaming video service already, they can offer discounts on shipping and even purchases for signing up for Prime... I'd say they're in at least just as good of a position if not better than MS for running the Xbox brand.

[UltraNova]

Ok let me ask you all economic analysts above what would be the selling price of XBOX in today's money? Keep in mind that the XBOX has been losing ground for almost a year now and its definitely not the product it was 2 years ago!

[Thugbot187]

Microsoft selling the Xbox would be a sign of things to come for the company. The Microsoft brand name has really taken a hit since they failed to get into Mobile and Tablets in a timely manner and PC sales have been contracting. Xbox really the only place where they can keep Microsoft as a viable brand. Thought I have to say I have my doubts here. Xbox One has certainly started off on the wrong foot.

[dcbronco]

This silly idea that Microsoft will get rid of Xbox needs to stop. It's just a Sony fanboy pipedream.

Here's a direct quote from a MS exec about Xbox profitability.

Many have wondered if Microsoft will have yet another change of heart and cut the price of the console ahead of launch, but new information says that’s probably unlikely. Xbox chief marketing officer Yusuf Mehdi spoke to GamesIndustry about the margins they’ll be making on the Xbox One at launch, and there’s little room for error.

“We’re looking to break even or low margin at worst,” he said. “As we can cost-reduce our box as we’ve done with 360, we’ll continue to price reduce and get even more competitive with our offering. You’ve seen us over the years constantly be focused on profitability and improving year over year. If you look at 360 that platform lasted for seven to eight years and it’s going to go for another three years. It’s incredibly profitable now in the tail.”

http://www.gamesindustry.bi...

Xbox is here to stay. Get over it.

[Anon1974]

dcbronco: "This silly idea that Microsoft will get rid of Xbox needs to stop. It's just a Sony fanboy pipedream."

So Valueact saying Xbox needs to go, are they just Sony fanboys? Are all the financial analysts saying MS would be better off investing that capital elsewhere, are they all Sony fanboys too?

Wait, are they all in on it, do ya think? Is this all just some massive, Sony funded conspiracy encompassing the entire financial community and even members of Microsoft's own board? That's devious! I had no idea everyone on wallstreet who thinks and has commented on the low ROI of the Xbox division were all just secretly Sony fanboys!

[UltraNova]

No xbox should go.

It should go away from MS's greedy corporate hands to a better more "consumer oriented" company like Amazon.

Look at Sony now if it weren't for the Xbox thread 6-7 years ago they would probably be telling us to get a second job to afford their console this time around.

Competition is good but only in capable hands.

[JBSleek]

Everyone who says Elop turned Nokia into a flop have no real sense of what really happened to that company. It's so interesting when people claim he tanked Nokia.

[cheetah]

He was asleep at the wheel, cmon man everyone knows that.

[Baka-akaB]

.I'll bite with lenghty stuff , we probably wont bother reading . There is one argument that some people still use to defend Elop:

"Look at Blackberry -- it shows that Nokia's doom was inevitable"

The answer, imo is : both companies had problems, and had to make difficult decisions; but Elop made a series of wrong decisions:

- the burning platform memo
- pre-announcing the death of Symbian before he had anything better to show
- adopting the unpopular, not ready and feature-missing Windows Phone
- giving strategic control of the company future to Microsoft
- killing alternatives -- for instance, saying that N9 would die "no matter how succesful" it was

And so on.

Blackberry made one similar mistake: their OS was also not ready. But, unlike Windows Phone , back then , their OS was popular and was fully controlled by the company.

Finally,

When we look at all of Elop's decisions together, we get a clear picture: he always acted to promote Microsoft's best interest.

He acted and talked like a Windows Phone advocate. He invited competitors (including Samsung!!!) to join the "ecosystem"!

That fact, by the way, puts down the argument that Elop somehow knew that Samsung would dominate Android, and thus opted for Windows Phone.

If he knew Samsung would become so powerful, why the heck would he invite the company to the Windows Phone bandwagon?

And let's not forget that Nokia was bigger, had better carrier relations and brand recognition than Samsung at the time. Even today, people say they would love to buy a Nokia Lumia... if it only had Android.

Didn't Elop made a market research before adopting Windows Phone? Wasn't it clear that Nokia would have to lift Windows Phone, and not the other way around?

All metrics, every single conceivable metric for Elop's tenure as Nokia CEO's shows not mild decline, but huge decline - this in an industry that was strongly growing. During his years at Nokia, the Nokia corporate revenues fell 40%. Nokia handset sales revenues fell 40%. Nokia handset market share fell 54%. Nokia smartphone sales revenue fell 69%. Nokia smartphone market share collapsed 90%. Nokia profits were wiped out to the tune of 92%. Nokia lost over 13 Billion dollars in shareholder value. From the day he joined Nokia, to the morning when it was announced he has been removed from office, Nokia share price had fallen 60%. When he started, Nokia's credit rating was near perfect; as he leaves office less than 3 years later, it was rated junk. This has been the worst performance of any CEO of any Global Fortune 500 sized company in a comparable period of time.

Anyway of course i'm not even good enough to even "try failing" like Elop ... the guys is obviously smart and successful in business ... he even finally pushed MS to adopt clouding and better web solutions for Office .but let's call a spade a spade . His run was a massive failure and helped killing an already sick and symptomatic patient . Or if conspiration theorists are right , a massive trojan horse

[Narutone66]

In addition to Baka-akaB, whenever Elop went to Nokia's HQ in Finland, he needs a lot of bodyguards to protect him from people who wants to hurt him for what he has done to Nokia.

[Pogmathoin]

Frosty response to lame humour frosty....

[StealthPandemic]

Don't we have like 2 or 3 of the same article? I don't to know what it means.

[christocolus]

Lol..

Ontopic: why are people so eager to know?N4g isnt filled with fortune tellers and prophets. We will know when we will know...time will tell.

Enough of this articles already.

[BG11579]

Yeah, only Patcher is alowed to do that!!! ^^

[BX81]

This guy has the look of someone who farts in an elevator with two people and blames it on the other person.

[cheetah]

Yeah lets get the guy that was asleep at the helm of Nokia for 5 years and put him in charge. Too funny.

[OpieWinston]

Aslong as they don't get rid of Phil Spencer there's hope for a strong product.

Which is great for everyone because of the competition it brings. I guarantee you if Xbox dies...Playstation will just pull in mad cash in their gaming division and then stop building new games and probably just back their major money makers...Much like Microsoft did with the X360. Strong beginning and a weaker ending.

[Fz6soldier]

Wasn't there talk of killing the surface tablet too. It seems like MS might be think of getting out of the hardware business and focusing on what they do best.

[SynestheticRoar]

That guy will steal your lunch.