Should Microsoft Spin Off Consumer Business? Paul Allen Thinks So

The private investment firm of Microsoft (MSFT) co-founder Paul Allen reportedly wants the tech giant to consider spinning off its consumer business, which includes a formidable search advertising operation as well as the popular Xbox gaming console.

The comments come as Microsoft is in the midst of a number of transformative changes, including the selection of its first new CEO in more than a decade and a major reorganization of its business lines.

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sAVAge_bEaST2029d ago (Edited 2029d ago )

So they want Microsoft to stop throwing money around.. Maybe even get rid of the division completely.. Interesting times.

Is this the first signal of Microsoft, leaving the gaming scene? who knows..

Lalanana2029d ago

Lol This guy Paul is delusional. Competition is always good..either from sony or MS. He acts like xbox brand is a failure..They have millions of supporters around the world. Not as much of sony but still..

sAVAge_bEaST2029d ago

He's the co-founder of Microsoft. What are you talking about???

GarrusVakarian2029d ago (Edited 2029d ago )

The co-founder is delusional? Lol, irony.

Deividas2029d ago (Edited 2029d ago )

Anddd....thats what happens when you dont read past the title.

C-H-E-F2029d ago

lalanana just said the co-founder is delusional...smh


Nitrowolf22029d ago

He's the co-founder

Look guys, if this was coming from some smuck far lower then it could be ignored, but seeing that it's the co-founder there is clearly something wrong.

Stsonic2029d ago

Long time no see mika, or is it maria now?

nukeitall2029d ago

Paul has a point, and spinning it off would make the consumer division more like a startup and more responsible for it's spending.

It can attract more innovative youngsters that will propel the company further, like what Google did and later Facebook.

MS problem is they are a matured company.

On the other hand, without MS humongus resources, something like Kinect would likely never be made. The type of experience, know-how, technology, people and research required is beyond most companies, let alone essentially a startup.

Also, without MS no company could really venture on competing in the console business. Take Sony for instance, if they didn't already have a business, there is no way they could justify let alone fund a console at this point.

rainslacker2028d ago (Edited 2028d ago )

Did you read the article? He(Paul) stated specifically that the XBox and the search business were successful products.

The idea behind this is to bring more value to the actual core businesses of MS, namely enterprise products which make them the most money.

It also allows MS to focus on those products, instead of being distracted by all these side things in the overall grand scheme of things.

The Xbox brand is successful, but it pales in comparison to the success of the rest of MS business...thus lowering it's value.

It's a high level economics thing.

This isn't him(Paul) saying MS needs to get rid of it, it's just a reorganization, where the Xbox brand, as well as some other stuff, would be a separate entity which would likely be autonomous to MS core business itself.

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Mikelarry2029d ago

as i said in the duplicate story

Personally i want the xbox brand to stay (yes i know shocking) but i want some of their bad habits to die a horrible death like

timed exclusivity
not being straight with their consumers
ill informed exec talking crap about others when they are no better.

other than that they have given me some great memories with games like crackdown and the gears franchise and would love to enjoy some of their new titles on the xbox one

Saviour2029d ago

Why xbox staying is shocking?lol. There's still millions of fan of Microsoft's product.

Mikelarry2029d ago

because i have been called a "fanboy" on numerous occasions just because i prefer one console over the other because of the features it provides meets my personal use, and also i never mentioned nowhere in my comment that they (MS) did not have millions of fan.

NYC_Gamer2029d ago (Edited 2029d ago )

Nintendo is the only company making any real profit from gaming..MS and Sony are both too huge and most of their profit come from other areas not related to the gaming market..Its not surprising that certain investors wants to spin off areas that produce the least profit gains...Sony & Microsoft game divisions could still be in red regardless of PS4 and X1 sales performance while Nintendo is in black even if Wii U sales are short.

MrCastle2029d ago

Sony has a lot of hopes riding on ps4 to bring in the cheddar.

Manic20142029d ago

Actually Nintendo, is going in loss with the console sales. MS is making profit but still have to recover costs for the RROD and Sony are recovering cost but are making steady profits.

Saviour2029d ago

Ever heard of xbox live? MS making more profit from live than the console itself.

iamnsuperman2029d ago (Edited 2029d ago )

As far as I am aware both Microsoft and Sony made roughly 0 from the last generation (I maybe wrong on this but when you factor in R&D cost and subsidised hardware it makes sense. Going HD is expensive). The thing for Nintendo is they have been caught out by not doing what the other guys can do because they have those branches to help take the initial loss and Nintendo doesn't have that luxury which (in the long run) could become a problem (evident by lackluster Wii U sales).

Microsoft might do it because of various issues with their software arm loosing market share (also a lot people think they have lost their way going hardware. I. E too distracting). Sony will stay due to being a lot smaller and hardware based. They have only just started bridging their arms which share the cost developing different things (video games can do that with pushing other tech arms their phones and cameras can use. For phones it is clearly Gaikai)

NYC_Gamer2029d ago (Edited 2029d ago )

^^^You're right Nintendo can't afford to take huge risk because they don't have other areas that could step in to stop the bleeding like MS&Sony do..

TheLastVoiceOFsanity2029d ago

if nintendo followed microsoft&sony's strategy it would be a dice roll that could possible kill the company in 1, or 2 generations. if microsoft did this they would be in a pretty similar boat as nintendo. the only way the massive loss plans can work is if you completely dominate the market. the profits probably really aren't there for microsoft as a whole to justify being in the video game industry if they can't dominate out right.

rainslacker2028d ago

One of the strongest reasons to keep the Xbox brand around for MS is that it builds name recognition for their products, and gets more people using their eco-system. Sometimes value isn't always measured in dollar signs directly.

Take Sony for example, since I'm not terribly familiar with MS products in this regard. Sony has Music Unlimited, SCE, all their movie studios to sell content, Blu-Ray interest, DVD interest, etc. The PlayStation line is a tap into those potential revenue streams. So say someone buys a PS3, and they take a loss on the console. However in the use of that console the person subscribes to Music Unlimited and rents movies. That person is now part of Sony's eco-system, and is possibly a continued revenue stream. Same with Xbox Live and PS+.

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kingdip902029d ago

So if this happens and microsoft owns azure xbox will no longer have free run of the service... xbox will have to pay for it with its own profits as well as pay for exclusivity deals out of its own pockets rather than microsofts deep ones.

Everything xbox values will be harder for it to maintain, to survive it would have to shift focus.

Maybe this is a good thing

pyramidshead2029d ago

Definitely not, would be a silly business move. Microsoft's wealth is what is keeping the Xbox division afloat!

kingdip902029d ago

If microsoft is keeping xbox afloat then cutting what is weighing you down off is a smart buisness move. If xbox could keep its own head above the water then microsoft would not be considering this...

You said it yourself xbox needs microsoft to float... microsoft does not need xbox at all.

rainslacker2028d ago

The reason for these talks isn't because the Xbox is floundering. It's because the Xbox brand(and more aptly the division that it falls under) doesn't perform as well as the rest of MS businesses. It brings down the value of MS in the eyes of investors(the big ones).

Paying off huge sums of money for RROD probably wasn't the best thing in the eyes of investors, but realistically, after all this time, if the Xbox was doing poorly it would have been scrapped. Look at how quickly MS has dropped other products in the past that didn't perform well. Why would they keep around the money sink of a gaming console if that were the case there?

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