ValueAct Still Pursuing A Microsoft Board Seat, Wants To Sell Off The Xbox Division

Steve Ballmer just announced his retirement, and the CEO of Microsoft has decided to call it a day within the next 12 months. The head of Redmond had been under fire from several circles, former employees, media and investors.

Back in April ValueAct spent $2 billion in order to take over 1 percent stake in Microsoft. And now gossip is flowing that the investment firm may be pushing for some big changes within the Redmond campus.

A top Microsoft analyst reveals that ValueAct is still pursuing a seat in the company’s board of directors.

[DEEBO]

well that sucks.even though i like sony more then MS.i hate see console makers go,hopefully this never happens.maybe this was the plan from the beginning.build the xbox brand up then sale it.

[Bigpappy]

You don't even need to read the article to know that what you are implying is not the case. Just read the title and the summary.

[JokesOnYou]

Yeah 1% and they want them to sell the division...sounds like some nutjobs trying to make some quick cash. Not going to happen, expecially since Xbox brand unlike Zune and other investments that have failed.

[MWong]

Well if enough boardmembers get behind ValueAct and they get a seat on the board of directors it doesn't matter what percentage of stake they have in M$. They just have to convience the a majority of the board that the XBox division isn't profitable. The lack of a solid vision and leadership of the division would make that easy to argue.

I doubt they will get on the board though, but if they do I wonder who might buy XBox.

[Anon1974]

The question isn't is the Xbox profitable. The question the board has to ask themselves is is the Xbox profitable enough. Could that money be better spent? That's what ValueAct does. They come in and work with the boards of company's to get them the most bang for their buck. They simply don't think that for Microsoft they're getting their money's worth out of any of their devices, Xbox included, compared to the returns they see from other divisions. They aren't alone in thinking this either, as other board members and analysts have been saying this long before ValueAct became involved.

Edit below: And he's dismissing the fact that ValueAct isn't in this alone. They'd just be adding their voice to those who've been calling for this for some time now but have been blocked by Ballmer.

[HiddenMission]

@JokesOnYou

I guess the jokes really on you considering that nut job you speak of is an investment company that spent 2 billion dollars let me repeat that 2 billion dollars for 1% and will be getting a seat on the board of directors.

Over the years many investors have not been happy with the profit/loss margin that the XBOX brand earns/loses. They have been calling for Balmer to be removed for several years and XBOX to be sold off.

With the new director from the investment firm and Balmer retiring there is a very good chance that XBOX end up becoming a separate company...which means no more massive spending for exclusives. Essentially the XBOX brand would be in the same boat as Sony and Nintendo so the fields from a capital point of view would be more level than ever.

[Bigpappy]

Seems like too many of you are getting ahead of yourselves here.

@ HiddenMission: The article clearly states the ValueAct is STILL PURSUING a seat on the Board. They are not on the board yet. And if they do get on, they with have one vote, but will obvious have more say. But they are not on the board.

@ darkride: Most of what you are saying makes sense to me. But ValueAct has no say in whether Ballmer stays or goes.

You guys are acting like Patcher here. You are looking at a few fact and trying to fill in the blanks. But there is no way to predict Who will replace Ballmer and how much influence ValueAct will have over the running of M$. So you should all make it clear that you really do not know how this will affect Xbox, except for the fact that Ballmer was a huge supporter.

You guy also ignore an even bigger supporter of Xbox (Bill Gates). He still owns more shares and has more influence over M$ than anyone else.

[MWong]

@ darkride66
Well said, +1 bubble

@Bigpappy
I don't think anybody is getting ahead of themselves. I think people are just stating possiblities. Especially, based off your initial comment to the OP. Bill Gates doesn't run M$, the board of directors run the company. The majority vote will decide the fate of the XBox, if it ever came to a vote.

Honestly, while I would hate to see the XBox go. However, I do think some of their money could be better allocated. $100 million for the controller design to make it look like an improved 360 controller. Not to mention the amount of money they have spent on R&D for the E3 XBone model. To just change it and spend more R&D money. Not to mention, paying for exclusives.

[Bigpappy]

@ MWong: When you reply to my comment please make sure that what you accuse me of saying is what I did say. I never said Bill Gates run Microsoft.

Now you also state that the board of directors run M$. If that is true, why did they not have Xbox as a separate company while Ballmer was CEO? No the do not run M$. It is run buy the CEO and the chairman. The board gets to pick who runs the company, but they do NOT run it.

The next CEO gets to decide the fate of Xbox business.

[Diver]

Well jokesonyou you don't realize that 1% makes them a top investor. Also they ain't alone on this.

If errr, when the Xbox has a bad start this gen it could force investors looking at bad office and windows sales to push the issue through.

Overall Xbox has yet to turn a profit. They're still down from the first box days.

Startin with attacking opengl to ram directx down our throats Microsoft is the worst thing ever to happen to gaming.

[Christopher]

@JOY: Actually, this isn't the first time that board of directors people (or shareholders) have discussed selling off the Xbox division. The reason? It's one of the least profitable divisions in the company but has one of the highest expense rates outside of software divisions.

[JokesOnYou]

All I see here is SPECULATION with nothing even close solid to go on, no different then speculation sony would split the ps division. No coincidence people giving a firm who has 1% stake and currently no board seat in a huge corporation so much weight are the usual suspects. Nothing to see here but wishful thinking really.

Here's some black and white facts for all the speculation:

"Microsoft Profits Up, Xbox Division Up 55%"

"The bold bets we made on cloud services are paying off as people increasingly choose Microsoft services including Office 365, Windows Azure, Xbox LIVE, and Skype," said Microsoft CEO Steve Ballmer. "While there is still work to do, we are optimistic that the bets we’ve made on Windows devices position us well for the long-term."
http://www.vgchartz.com/art...

-I SPECULATE that based on these latest financial FACTS micro will now commence their world domination plan to take over the planet, or maybe just continue to support the Xbox brand. Who knows? lol

[JohnnyBadfinger]

It's bad enough having Microsoft in charge of Xbox if it were sold I'd put my money on activision or EA even Ubisoft as the main publishers they could make heaps from having their own console.

[morganfell]

There is a reason they want to divest themselves of the division. Here are thre pieces of info from Gaf:

http://i.imgur.com/UwdTasL....

http://i.imgur.com/ZUJHD.pn...

And the third piece is from a post where the individual stated that it should be considered how the Xbox division will be viewed early next year post initial launch. If Sony appears to be widening a lead it could drive some radical changes.

[Anon1974]

It's no secret that other board members and investors have long had the knives out for the Xbox. Looking at it from a business perspective, even though the Xbox makes money now the return on money invested is paltry compared to what we see coming out of Microsoft's other divisions. You can understand why they might want to see it go when the capital could be spent boosting a much more profitable software division. But Ballmer was always the reason that this talk never went anywhere. He was a huge Xbox supporter. And now he's gone.

With ValueAct now adding its considerable influence to a board that was already unsure of the Xbox but held in check by Ballmer that leaves the division on shaky ground if the Xbox One fails to deliver, and with Windows 8 not exactly taking off and PC sales continuing to slump, Microsoft despite making obscene amounts of money could suddenly start to feel the pressure.

There's already been a number of analysts sounding the alarms regarding an uncertain future for the company. That's not saying they're in danger of going bankrupt or any such nonsense, but who knows what the company will look like even 5 years out.

So the question is, if Valueact and other board members get their way with the XBox, what then? Will it be spun off into it's own company, relatively intact or simply sold? And if sold, to who? When the analysts started talking again about the Xbox division being sold recently, Samsung was the name most often thrown about.

I wouldn't write off the influence that ValueAct has over the company. It's already being speculated that they're the once who've forced Ballmer out, and they don't even have their board seat yet. And they'd just be adding their voices to the others that think the Xbox divisions money could be better spent on a more profitable division, but have been held in check by Ballmer over the years.

[vigilante_man]

Samsung make great hardware. We could see amazing hardware from both Sony and Samsung.

We need competition, where ever it comes from. This summer has taught us that.

[TheTwelve]

You're speaking too much sense too early on these pages, bro! As much as Xbox supporters say this is a Sony-site, you will see them come out to disagree with you on this!

[Ripsta7th]

Xbox brand isnt dying anytime soon
@TheTwelve -you should be grateful he isnt right because if samsung takes over xbox its game over for sony Lol

[Anon1974]

No one says the XBox is dying. That's not what this is about. The problem that shareholders and others on the board had was how much the Xbox division was profiting compared to capital invested with other divisions.

To simplify what we're talking about there, If you have two different revenue streams going into two different divisions and one revenue stream is making you 20% return and the other 5% return, it just makes sense that you may consider switching both streams into the division making bigger returns. With Microsoft, there are a number of divisions which would produce more returns for that invested capital, which analysts and board members have been pointing out for years but were blocked by Ballmer.

ValueAct "sourcing investments in companies they believe to be fundamentally undervalued, and then working with management and the company's board to implement strategies that generate superior returns on invested capital." It's all about more bang for your buck, and any business would be foolish if it didn't reassess it's invested capital versus returns from time to time. If it were just ValueAct saying this, you could probably just ignore them, but this has been simmering well before ValueAct made their move.

It has nothing to do with the Xbox brand "dying" or even being in danger. The question is, could Microsoft be spending that money better elsewhere, and many have long thought they could but have been stopped by Ballmer who just presided over the worst quarter the company has seen in recent history. And now he's stepping down.

Edit: On a side note, I'm surprised no one has chimed in yet and said "But..but Sony!" Usually, you can't discuss a company's financials without someone trying to shift the conversation to Sony's ongoing troubles.

[TheTwelve]

@Ripsta7th

--- It was supposedly "gameover" for Sony when Microsoft entered. I recall recommendations that people sell Sony stock when Halo 3 came out...

...and now we find ourselves here, today.

I'm not worried about Sony. They know how to battle.

12

[Deadpoolio]

I'm sorry I stopped reading after Valueact and considerable influence...When you have a 1% stake in a company you have NOTHING...Most companies don't even let 1% shareholders attend the meetings let alone would they ever even consider listening to anything that came out of a 1% stakeholder's mouth

[creatchee]

@TheTwelve

"--- It was supposedly "gameover" for Sony when Microsoft entered. I recall recommendations that people sell Sony stock when Halo 3 came out...

...and now we find ourselves here, today."

Halo 3 came out in September 2007. Sony's market cap was $54 billion in December 2007.

Today, Sony's market cap is $20.43 billion.

Selling Sony stock would have been an extremely good move if you did so before Halo 3 came out. Just saying.

[TheSauce]

Samsung would probably love to buy xbox. They've always said that one of their goals is to have a step-up in the western market. Xbox is pretty much North America so buying them would be a huge bone for Samsung.

[kewlkat007]

" $2 billion in order to take over 1 percent stake"

Dayummm

[Mystogan]

Microsoft selling their Xbox Division will never Happen. Its a multibillion dollar business, These guys are pretty dumb if they really think that.

[PlayStation_4]

Samsung may be a nice console hardware manufacturer

[Eddie20101]

Agree

[Eddie20101]

Selling the Xbox division to another company would be the best thing to happen to the gaming industry. Still would have the competition without the take over the world attitude that Microsoft has.

[hqgamez]

Sorry to break it, but its probably the truth. MS spends most of the money trying to market the game console everywhere and purchase exclusives and dlc because they want to hurt the others reps.
if you think back towards the gta iv dlc for 50 million, that is a bunch of money, deals like COD dlc 30 days is private because that is probably some 100million plus deal, fifa 14 on every X1 EU (EA must been paid!!)
they hope they can build a name by buying off stuff to bring the fans which is the wrong way. even tho they brought some in. it's not working. They believed they own this generation and introduced the Xbox One with policies that users will follow and become a cash king. This is probably where they hoped to dominate and flow cash. Now you see how that went.

[markbob]

Im sure MS will do exactly what Sony did and tell the "activist investor" to take a hike

[lastofgen]

I agree.
I'm glad sony told the other guy off and I hope ms does the same with these new valueact people.

[Prophet-Gamer]

MS isn't the same company as Sony and the implications of the two are different. MS makes a ton of money off of their Enterprise division with Windows, Xbox represents a tiny part of their revenues. If you look at it that way, selling off Xbox or spinning it off would be good for the company.

On the Sony side, PlayStation is one of the few profitable things inside Sony, they haven't made money in years. Iirc Loeb wanted to do was split the entertainment side from the hardware side which would have made him tons of money but pretty much destroyed Sony. Selling off Xbox wouldn't make so much as a dent in MS, in fact it may help them free up money to invest in their OS side. Splitting Playstation from Sony would have pretty much ended a good portion of Sony.

[Thatguy-310]

"We've always had different competitors, we were in the space before Microsoft and we may be in the space after Microsoft,"
Like Sony said that they see competition come and go.
http://www.computerandvideo...

[Belking]

I'm sure they said similar things about Samsung and Apple too...lol

[n4rc]

1% doesnt hold much sway.. just because they have backing on one issue doesnt mean xbox is going anywhere

[Anon1974]

It's more than just ValueAct though. Analysts, other board members and investors alike have long been mulling the value of the division to the overall company. The only reason that talk never went anywhere was because of Ballmer, and now he's stepping out. ValueAct would already be adding their voice to the voices already calling for this. And if the Xbox One doesn't meet expectations, you can be damn sure these voices are going to be heard with no Ballmer to protect the division.

It's already speculated that the reason Ballmer is stepping down was due to ValueAct looking to force him out otherwise. I wouldn't write off the impact they could potentially have on the company, especially when they aren't alone on the board in thinking that something better could be done with the money currently being invested into the Xbox.

Edit below: Are any of you even listening? This has nothing to do with Xbox not being successful. You all forget, they're being measured against the rest of Microsoft's divisions which are making obscene amounts of profit while they aren't. That's what this is all about. Microsoft getting the most bang for their buck.

[thetruthx1]

@darkride66 you sound silly Xbox ain't going nowhere except a bigger user base in near future

[kewlkat007]

All the Xbox brand has seen is growth from one gen to the next..No longer in the red year-on-year.

What board member would not be happy..

[tokugawa]

edit forget it

[gamer2013]

Here's someone that wants to see MS leave the gaming industry.

[Prophet-Gamer]

The amount of people disagreeing with you is insane. seems a lot of people put their fingers in their ears and refuse to listen. Apparently, some of the people on this site know better than top business analysts and billionaire investors.

[jukins]

whenever some investor with a lot of shares wants to sell off a division its always for the quick payout instead of trying to have money constantly trickling in over a long period. its sad thats how things work.

[Ripsta7th]

Did i read that correctly? They paid 2 billion for one percent of the company?? Dammmm how much is MS worth?

[SilentGuard]

pretty simple math. 200 billion.

[Ripsta7th]

Yup and thats the xbox division were talking about

[Ashunderfire86]

More than a enough to laugh all the way to the bank with that fresh green money.

[EXVirtual]

M$ will probably do the smart thing and tell em to take a hike.

[Prophet-Gamer]

Short term, the smart thing for investors is selling it off or spinning it off into it's own company. Long term, it's debatable, but unfortunately, most investors only care about short term.

[TheTwelve]

Wow, look at this crazy talk:

"“Xbox is cool, but by our estimates Microsoft has not made money at this.”

--- says the article. Fact is that while Microsoft has made money on their Xbox venture, they've not made as much money as they've invested overall. Hence, they've not made a profit on the Xbox. And they way things are looking, they won't make a profit this gen either.

Actually reminds me of this old (January '13) article about the Xbox division one day selling to Sony:

http://hothardware.com/News...

*shrugs*

You know, who knows?

12

[vigilante_man]

Not to Sony. We need the competition for all gamers sakes. I would love to see Xbox Division sold off to a company that makes great hardware, such as Samsung, and that will develop great studios with great games.

Who knows, they could buy the software from Microsoft for the consoles. I have never felt Microsoft have gamers at their heart. Stranger things have happened.

I would actually consider buying a Samsung console if they had the right focus.

[TheTwelve]

Samsung would indeed be a deadly opponent for Sony, as they are now in every place where the two companies meet.

[Baka-akaB]

Last thing anyone should want is most things under one roof . Even if we went back under a ONE major console owned market , wich wont happens again anytime soon , we need truly big publishers apart and as a main force .

[TheTwelve]

I hear ya, but I'm not sure. Jaffe once said that if there was only one console, the competition would then break down to battles between publishers and developers.

There will never be no competition in the gaming world.

12

[DeadlyFire]

One console market isn't likely, but Sony is going to make it look that way over the next couple of years.

Andriod console competitors could step up into the high end gaming devices at some point.

Samsung, Apple, Amazon, and Google could be serious competition in the future.

[tokugawa]

one console would have meant that the ps4 would have launched in another 3 or 4 years with 2 or 4 gig of ram max. a shitty cpu and gpu to boot.

no competition means crsppy on-line where you cant invite your friends to the game, and you cant chat with them. etc etc.

people need to stop these wet dreams of sony dominance.

it would be a disaster if one company ruled the market.

[Deadpoolio]

Thats what happens when you knowingly release a defective product on to the market....A product that is so epically defective that for the first 4 years of it's life span it has a 55% failure rate...They lost Billions because they knew they were releasing a broken product and did not care, they were that intent on getting to the shelves first....

And yet they are again having the same overheating problems with the One80, yet they wont rush it to shelves this time...They have 2 choices remove the 32mb of eSRAM which will stop the overheating OR underclock the GPU and essentially make the system weaker than it already is

[gamer2013]

If MS hasn't made money off Xbox, especially with XBL then Sony is in far worse condition. It's not MS that has to sell off a building whenever they want to do something.

[NYC_Gamer]

That 1% isn't enough to make any huge major decisions within a company

[Baka-akaB]

Obviously if that rumor was true , they wouldnt be acting alone .

And it's actually a lot , with bigger shareholders being the vanguard group at 4.30% or BlackRock who owned 443 million Microsoft shares representing 5.32 % .

Bill Gates himself , Microsoft co-founder and board chairman, owned 398 million shares as of May, a 4.78 percent stake.

And ballmer got 4%

[SpideySpeakz]

That isn't the point. If other board members, and investors agree with the proposed plan, than it's likely it could happen.

[Roper316]

" Wants To Sell Off The Xbox Division "

give that man the seat already! The gaming industry would be such a better place without MS polluting it. It would like healing someone of cancer because that's all that MS is on the gaming industry.

[SliceOfTruth888]

Do explain how the gaming industry would be better without xbox PLEASE i beg of you. What i can tell you as a Fan of games, not a fanboy, is that Microsoft has done so much for gaming its not even funny. When Sony was denying the world from online with PS2 even though dreamcast had it, Microsoft took the ball and ran. Sony is still behind in this space, everyone wants to talk about the instant game collection but forgets that PSN sucks.

[Roper316]

charging for free apps, charging for f2p games, making paid MP the standard so others have to charge to compete with a paid service.

Trying to take away consumers rights and if you don't think they will try again your delusional. No 1st pary support for the last 4 years or so for the 360 outside of free apps that they charge for & kinect shovelware.

Would you like me to keep going? MS is just a scumbag company at it's heart & soul and that will never change even if the playersexecutives do.

people like you who support these types of companies and justify their greedy actions are just as big of a problem imo.

[Megaton]

Agreed. They're bad for business. I'd prefer a different company at the helm of the Xbox. I'd say Sega, but they probably wouldn't be able to afford it.

[SignifiedSix91]

I'd much rather it be samsung. Sega isn't as great as it used to be. they suck now.

[tokugawa]

although samsung scare me coming.. why? because they will destroy both nintendo and sony.

it would be a pleasure watching the sony fanboys crying.

man i hate fanboys

[Baka-akaB]

I dont even see how you'd prefere sega at the helm . They are out of touch for the most part with what their fans want , and terrible at business .

They can't even manage their own ip , aside from yakuza , Miku , phantasy star online and Virtua fighter , let alone extra ones from from MS .

[baodeus]

@roper316,

please keep going. I really want to know how evil MS is in DETAIL; as detail as you possibly can.

[SliceOfTruth888]

Wow i mean anyone who thinks the Xbox division will be sold off.... they better get their fanboy meters checked out because they are overloaded

[Megaton]

Not everything boils down to console war idiocy. Shareholders at Microsoft have been wanting to end the Xbox for years. It's not profitable enough. It's peanuts. Small ball. They want more Windows/Office folding money, not pocket change.

[DEEBO]

there are more investor's then just this one who are not happy with the xbox not being able to make a profit.this is their third console and they haven't recoup all those billions from the 1st xbox.

[mydyingparadiselost]

Oh man, I can see it now. MS sells the Xbox brand to... Nintendo. They get KI back along with some other notable properties and release The WiiXUBox, complete with 18 gb of ram, kinect Pokemon and a gritty, realistic Zelda set in.....SPACE!

[chuckyj1]

Well just like a month ago a board member of Sony wrote a detailed letter/plan to spin off the Entertainment division from the playstation brand, b/c Playstation is currently losing money while the entertainment division (Movie division) is making money. So this happens more than one would think.

But, when it's a board member that holds about 1% I don't think they will be driving the agenda.

[Anon1974]

It wasn't a board member. Loeb doesn't sit on Sony's board and his company has roughly 1 billion invested in Sony (this does make his company the single, largest shareholder though, so you're right that he isn't without some influence)

Sony's board looked at what Loeb proposed, voted, and unanimously rejected it.

The difference here is with Microsoft, other board members and investors have been clamoring for just what ValueAct has been proposing for years. ValueAct is simply adding their voices to the already growing chorus. In the past, Ballmer always was able to keep these board members in check but with Ballmer leaving and with the Xbox One potentially shaping up to be a disappointment, what's to stop the board from finally deciding that the profit made on the Xbox isn't enough to stop them from investing that capital with a division that's showing much higher returns on investment? ValueAct wouldn't be necessarily driving the agenda, they're just getting on the bus with the others.

[gedden7]

Wow MS and Sony have $$$ troubles... WOW... I hate how the industry is going, I wish these companies focused on innovation rather than pricey tech. They would have saved a lot money that way and would have to selling an insane amounts of software to break even.. I hope this isnt true.. Gaming Industry needs as much competition as possible...

[SITH]

Apparently people are oblivious that sony is in the same exact position. It's hardware division which playstation is only a part of, is failing to pressure from Samsung and other hardware companies. It is an uphill climb these days for consoles. http://www.gamesindustry.bi...

http://www.gamertheory.com/...

[vigilante_man]

Gotta say, Sony hardware is looking pretty good at the minute. The Vita will get a big boost with price cuts and the PS4 will ship well when released.

Sony have made a massive step into smartphones with Sony Xperia Z being one of the front runners and their new Xperia Z tablet has been voted Best Tablet of the Year so far by Tech Radar. If you are going to mention Sony, get it right.

But I would love to see a Samsung console. Bet they would make a pretty decent handheld too.

[SITH]

"The idea is that by splitting the "software" side of the business (which has largely been successful) from the "hardware" side (which is in pretty serious trouble), not only will Sony unlock the value of the Entertainment business by freeing it from the ball-and-chain of TV manufacturing and the like; it will also stop using the success of the Entertainment business to disguise the extent of the rot in the hardware business, and have a much stronger motivation and drive to aggressively reform that side of the firm. By dividing the firm into two, Loeb argues, you'll save both sides (the division might actually be into three, since Sony still holds a number of insurance and financial services divisions which are profitable but completely irrelevant to the core business)."

The above quote is from the link above you cared not to read so you would, "...get it right." You are under some impression that, since A & B are doing great, C, D, E, F, G, and H are doing great also without affecting the overall performance. The playstation software division is directly affected by the Sony hardware division which includes TVs, cell phones, computers, and multiple other non playstation products. They all use the same pool of engineers and designers which is the problem with splitting the playstation software entertainment arm from the hardware division to isolate it (A & B) from the failings of C, D, E, F, G, and H. Get it now?

[vigilante_man]

No!

[MultiConsoleGamer]

You can't get a seat with only 1%.

The "rumor" is a conveniently time lie.

[SITH]

My understanding is Valuact already has the votes needed to change things at Microsoft, and they need to break some sort of tie in the votes by gaining a seat and thus ability to vote on the board.

[MultiConsoleGamer]

No they don't.

[Baka-akaB]

again the biggest shareholders got what 5% ... so it is quite possible with support .

Still i dont believe the rumor anyway

[MultiConsoleGamer]

No it's not.

[gdguide]

If Sony takes away market share this next gen, that's not good enough for a huge company like Microsoft. We talk about 80 million console users and act like that's a lot of users. Well Windows 7 has 700+ million plus users. Investors like the Xbox doing well, but would trade that easily to have Windows 8 take over tablets and mobile to compete with Apple and Android. That is their main focus, and seriously risk losing in the tablet and mobile markets. Not to mention an already eroding traditional PC/notebook market.

[GraveLord]

Xbox isn't as successful as some people make it out to be. Just getting into the industry Microsoft spend BILLIONS on the OG Xbox. The Xbox 360 was sold at a loss for years and then the RROD which cost them a couple billion as well. Who knows what's happening with the Xbox One..

All those timed-exclusives and money-hats add up. You would think with the Xbox brand being well established that Microsoft wouldn't need to be so aggressive throwing money all over the place. Are they that threatened by Sony? They should be, but even Sony has never been this desperate at trying to keep its brand relevant.

[dark_101]

As I said before
Its funny that Steve Ballmer owns 333 million shares,4 percent stake,so literally he can vote for the next CEO

ValueAct currently owns 0.4% stake and people are saying that they are willing to buy more to have voting rights. And I don't personally think they will take this risk since

Microsoft is covered up from their shareholders and founders (Paul Allen, Bill Gates,Kevin Turner, Steven Jay Sinofsky, Steve Ballme.. etc)

and even if ValueAct made it, Im sure they don't want to mess with these guys.

[Anon1974]

But who's to say those shareholders don't want the same thing as ValueAct? They all want the company to focus on what will make them the most money.

Again, if you've been paying attention to MS politics, you'd know that for years there have been board members and shareholders alike who have been less than keen on the meager return on capital the Xbox division generates when compared to other divisions within Microsoft. It's not making money, it's about the return on the investment and could that capital be better invested.

Fanboy pissing contests aside, the leadup to the Xbox One launch has not gone smoothly, and all signs are pointing to a disappointing launch despite the billions being poured into the division. With Ballmer no longer standing up for the Xbox, with the future of the console uncertain and with mounting pressure due to underperforming Windows 8 sales and a declining PC market, you can bet your bottom dollar there's going to be some heated discussions internally at Microsoft regarding underperforming divisions. What guys like Jokes above miss when they cherry pick quotes and grab numbers for only one quarter from dozens is that the return on investment for the Xbox division continues to be one of the worst for the company.

ValueAct thinks it can be better invested within Microsoft, and they are hardly alone. Everyone involved wants the strongest Microsoft possible, and nothing should be off the table. Anyone who writes off ValueAct as going it alone with this idea because 1% of Microsoft only buys you so much influence hasn't been paying attention over the years. They aren't alone.

[OssamaBinDoggin]

Lol, they shouldnt even be talking big when they only own like 1% of ms xD

[JediDiah]

IF EA bought Xbox this would put Sony on the ropes!

[TheObserver]

Wow, people act like 1% of MS is nothing. 1% of MS is 2 Billion dollars. If you spend a dollar every second, it would take you what? 60 something years to get 2 Billion.

More importantly, 1% Stake is enough to make them top 15 investors in MS. Bill gates is at 6% and Balmer is at 4%. They do have influence. You guys play sales, but don't understand the significance of this. Sad.

http://finance.yahoo.com/q/...

[gamer2013]

I'm not surprised that most of the negativity here is coming from MS haters. Post history tells all.

[BigDog55]

I've always wondered why a software company would get into making hardware?? Just look at Zune and the Surface and how well they have/are turned out!

[ahm]

Oops