Microsoft’s Ballmer, Gates Oppose Breaking Up Company

Microsoft Corp. Chief Executive Officer Steve Ballmer and Chairman Bill Gates, responding to a request to consider breaking up the company to boost the return for investors, say they aren’t in favor of the idea.

In October, Goldman Sachs Group Inc. suggested that Microsoft might spin off some consumer businesses, including the Xbox division, so that it could better focus on its main products. Microsoft’s shares have tumbled 14 percent this year, hurt by concern that it’s losing ground to mobile software from Apple Inc. and Google Inc. A slow recovery among corporate customers also is weighing on sales, Goldman Sachs said.

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MrMccormo2985d ago

The fact that this is even being suggested shows how poorly the XBOX division is doing.

Mystogan2985d ago (Edited 2985d ago )

This is good The Xbox brand would have never made it if they didn't slap microsoft on it.

IMO they shouldn't break it up as it is now gaining more profit and now regaining the lost money from previous flaws and such

captain-obvious2985d ago (Edited 2985d ago )

when Gates used to run things
it was all about software
everything else they made was not big and considered a secondary side job
and software was #1 ,their main focus was 90% software

when Ballmer started runnin things he is just trying too much to expand MS in much more other big markets
i mean its cool but the way MS works is just rush things and pay a lot of money on adds

and that could hurt the budget on the long run if those expanding tries are not working well

im no business guy but this is my point of view on this subject

Nihilism2985d ago (Edited 2985d ago )

Conversely "Playstation would never have made it if it didn't have the Sony name slapped on it"

I think the latter is more true "playstation" sounds like a fisher price toy. But whatevs bro. Get your hardcore gaming on!!!!!!!!!!!!

P.S they sell consoles at Toy's 'R' Us, you know console gaming is only for the elite.

raztad2985d ago

I cannot complain. PS is the only "toy" that runs Gran Turismo. 8 days to go baby GT5!!


OT: Interesting development, splitting MS was suggested many times as an anti-monopoly measure but never materialized. Now the idea is coming from inside.

AAACE52985d ago

This is more of a reason for MS and Nintendo to build their next console together! Then it wouldn't be such a burden on either company. A Nintendo console would get the much needed FPS games it needs and a MS console would get much needed platform games.

They could split the cost of making the console, split the profits made on the console, keep all revenue from their first party games and split prifits from 3rd party games!

Nintendo wins, MS wins and Gamers win!

toaster2984d ago

Yo dawg, we heard you like Microsoft, so we put a BSOD in your RROD so you can crash while you crash.

AAACE52984d ago

I hate to sound like one of the Ps3 fanboys, but MS needs some high production studios!

I am getting tired of the same games over and over again... Halo, Fable, etc. They need some studios who can make a few different games. I can see why they let some studios go. You can't pay all this money to them and have them just produce 1 game! Bizarre creations only made PGR games and Geometry wars just grew into a good game. Lionhead has only made Fable games for the most part. Bungie has only made Halo games.

It's getting to the point where i'm starting to buy more 3rd party games than 1st party games!

Sony makes more first party games, but a lot of those I just don't like. My Ps3 library is slim!

I'm starting to wonder if the industry is big enough for 3 consoles anymore. With exclusivity dying out and almost everything going multiplat, it makes me wonder if the industry should just drop down to 2 consoles.

I would really love if 2 of these companies would just come together and make a console. Ps3 fanboys hate 360 so much, they would probably be pissed if Sony and MS went in on a console, so Nintendo and MS going in would be a better fit in my opinion!

You can be an idiot and say MS should just drop out of the console business, but at the worst, they will probably just become like Sega and have versions of XBL hit other consoles.

gamingdroid2984d ago

Actually, it all depends on how you look at it. One could say that all the positive improvements Xbox has been making is going unrecognized, primarily because MS other division is a mammoth!

Considering how profitable the Xbox division is, it only amounts to like 2-3% of MS income.

This is similar to how Blizzard broke out of Vivendi (I believe was the company name), so that Blizzard would be better recognized by shareholders instead of hidden behind this large corporations balance sheet.

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Omega42985d ago

No it was suggested cause the Xbox is the only thing in the EDD that's making a good profit and everything else in the division like the Zune brings its down making it look bad.

Splitting the division would allow shareholders to see just how well the Xbox is doing.

Sheikh Yerbouti2985d ago

Yes relatively speaking, but it is not about EDD it is about Windows and Office. Those actually make $500 marketing campaigns possible.

The 360 may not survive a break-up.

Trizard2985d ago (Edited 2985d ago )

Omega4 is right. I'm not saying the Xbox is a great a system or worth the money but M$ is making a shitload of money through it (Console sales, cheaper to make than the PS3 for sure with out Blu Ray), Live, and Kinect (all overpriced). Compared to other M$ divisions like the Zune (which is a brick), Windows 7 Mobile (which I have never seen anyone use or buy a phone with) and Windows (which has lost a lot of brand power and loyalty since the failure of Vista in terms of critique) Xbox is doing quite successfully.

shikamaroooo2985d ago

so what if there making profit they still having made up for 500mill marketing for kinect kintect R&D RROD R&D for xbox 360 and mainly R&D for xbox 1 seriously if M$ break up i guarentee you xbox wont survive

Trroy2985d ago (Edited 2985d ago )

You're joking, right?

You realize that MS keyboards and MS mice are in EDD, yeah?

Do you know how many MS keyboards and mice are sold each quarter? A gazilla-ton, and that's being conservative. The games division is _not_ the big money-maker of EDD. Keyboards and mice are manufactured/sold for HUGE profits. The revenue for those products is probably close to the entire revenue of Logitech.

Sadly, the games division is what keeps EDD profits down... not up. The XBox is a defensive measure -- meant to protect the Windows business from a "livingroom assault".

After all, what do you suppose would happen to the big moneymakers of MS, if everyone could browse (they already can -- and it'll get better with time), and do things like word processing ("Google Office") on a non-Windows machine, like the PS3 or Wii, in their livingroom?

gaden_malak2985d ago

It's no doubt making money but how much are they spending? It is profit or even or loss?

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toaster2985d ago (Edited 2985d ago )

Yep, with their constant milking of gamers, they sure are living in cardboard boxes.

Convas2985d ago (Edited 2985d ago )

Oi, Omega, you've gotta remember, there are still a lot of shareholders angry about MS's losses with the 360 over RROD, that was 3 Billion. And a lot of this ire IS about the Xbox brand. The EDD just spent 500 Million for Kinect, and you can be sure they are not about to disclose the R&D costs for Kinect.

I'm really concerned right now, both as a Gamer and as an Economic major. The Xbox looks like it's on shaky ground, and if it goes belly up, who knows where the industry'll be in 5 years.

ssj2gohan832985d ago

I do believe this is why most studios are moving to the ps3 as the lead platform, as a just in case measure. Besides, this can only be blamed on bad decisions on Balmer's part and his management teams. And if it keeps on going with no clear direction; the share holders will be out for blood.

I agree with what you said about the economic implications if Microsoft were to fall. Who knows what could happen. The worst case scenario would be another video game crash, and that could invariably spread over to other industries making things worse.

IRetrouk2985d ago

no video game crash will happen, sony and nintendo are doing well, sega could probs even make a comeback, i would defo buy a new sega console

Trizard2985d ago

Same, I would definitely buy a new sega console. I justed loved the dreamcast with Phantasy Star Online, Shenmue, and Sonic Adventures. Made my childhood.

Mystogan2985d ago

Microsoft Falling? haaaa!!

There is no way Microsoft would fall before sony

IRetrouk2985d ago (Edited 2985d ago )

along with, crazy taxi, virtua fighter, sega gt, soul calibur, virtua tennis among others, bubs up for naming some of my fav games.

the shareholders arnt happy, beleive if any console maker is gonna pull out it will be micro, they have lost so much money from the xbox and the 360 that if they dont turn their kinect bargin into profit then buy buy xbox. sad but true.

Mystogan2985d ago

Dude kinect is already a succes.. Xbox will never die as they are Gaining profit everywhere ,Ads on Xbox live, gold subscription, the console itself..EVERYTHING.

45million X $300 for every console sold and $50 for xbox live from 20 million users every year for 5 years do the math...let me make it easy for you...THEY ALREADY WON THAT 1.3 BILLION BACK!!

It will never die no matter what shareholders say, they don't RUN the company.

ssj2gohan832985d ago (Edited 2985d ago )

Kinect is only successful on the short term, but what about long term? Will it still be successful in one year from now, or how about two years? Your comment on share holders is rather funny.

Well said.

Everyone else.
A crash can manifest itself in any way. Lets use MS as an example shall we. Lets say the share holders at the next meeting decided and voted on to remove the EDD. If that were to happen, MS has eliminate the department by decree in certain amount of time, and if the share holders voted that the department has to be removed and cease to function within 3 months. How do you think the industry would react to that as a whole?

It also seems people don't know how many studios and publishers rely on MS for support and a means to sell their product. These very same studios would go belly up, as a result, if they can't recoup their losses quick enough by switching development to one of the remaining platforms. The studios, and, or publishers will fold, or they will downsize. That in it self could cause a crash.

Oh, one other thing. I know it might be hard for some people on N4G. Can you please think before you type, and if you don't know something. Take the time and research it before you spout some ignorant tripe.

P.S. I'm sorry that I didn't clarify enough in my op. Oh well, **it happens.

Theoneneo812984d ago

(off topic) is there some sort of rule on the net that ever pic of balmer has to have some sort of monkey face or is this how he always is.

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The real killer2985d ago

So far as i know, Microsoft buy this technolochy.

Fallouts2985d ago

3 billion? where the hell you got that number from?

they spent 500 mil and micro is claiming to sell 5mill b4 the year is over. they already sold as much if not more than move in just over a week.

they are also still selling a shit load of consoles and making a boat load on live all while most multiplats still sell better on the 360. the only thing shaky i see is you bugin for no real reason

IRetrouk2985d ago

umm kinect is just over a mill worlwide, sony sold a mill in us alone, so far kinect sales 1 mill, move sales 2.5 mill

Fallouts2985d ago (Edited 2985d ago )

1 million for kinect and 2.5 for move world wide.

kinect out for a little over a week, move over 2 months.

no one knows the official kinect sales but from the look of things its already gaining a rapid catch up.

and i was talking about u.s to begin with. i live in the u.s i couldnt care less what japan or any other place is buying. so to my point kinect sold just as much if not more.

so uumm, yea...

catguykyou2984d ago

"Kinect is only successful on the short term, but what about long term? Will it still be successful in one year from now, or how about two years? Your comment on share holders is rather funny. "

Kinect is sold for a profit instead of taking a hit per unit with the idea that software sales will make up for it. It's a much better way of recouping costs of production and R&D. Just like Nintendo and the Wii, MS wont lose money on the Kinect because of this simple fact in the short or long term.

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TheObserver2985d ago

At the end of the day, anybody failing or doomed is bad for the videogame industry.

MajestieBeast2985d ago

They are putting everything in the kinect basket, and thats why we wont see a new xbox before 2012.

ChozenWoan2985d ago

2012 is too close and with consoles still over the $99 mark, there is no need to rush. Also, the economy is recovering, but slowly, so no need to try to push expensive hardware onto the market. Plus, if Ninty was really going to release a Wii HD, this would have been the year to do it.

2013 just sounds like a bad year to release a new console, so I'd say 2014 for the first of the next gen consoles. Likely Nity will be the first to upgrade with MS close on their heels.

Sony will probably step up to the next gen with them or a year later depending on how well the PS3 is doing and how much tech they can pack into an Affordable console.

In the mean time, the 360s and Kinect as well as the PSMove are the "new consoles" so get ready for a long wait for the Gen8 consoles.

etownone2985d ago

God I hope your wrong.

Here's hoping the next Xbox for 2012.
7 yrs is long enough!!
And I can only imagine on the specs of the next Xbox by then.

wedgie2985d ago (Edited 2985d ago )

This does not really seem to be about the XBOX, but just the company in general. Microsoft is a lot of things, not just the 360. Same with Sony and the PS3.

It seems that problems and threats are not due to the gaming division doing poorly or anything like that. It is Apple, Google, and their phones and apps in the iPhone and Droid, as well other software from those companies that would be causing the problem as Microsoft also tries to show off a fun, hip side instead of just doing Office.

Therefore, this article is more about the software side of microsoft in that respect. It is related to the new Windows 7 phone, etc., that was just released to combat the Apple and Google products, which is what the article referenced.

In the end, they break (or will break) about even on the XBOX. Where Microsoft is going to make money is on Windows 7, etc. Hence why, for the stockholders, they thought about splitting it up. Personally, I hope that Microsoft continues to stay strong, for Windows 7 is the best operating system I have ever used.

Also, no gamer should want the XBOX to go off on its own. I feel that without the Microsoft money and backing, it would not be the system that millions enjoy, and it would not stay that way. From the other side of the fence, without the healthy dose of competition seen this generation (hear me fanboys: HEALTHY. Stop overdoing it) a lot of the great features on the PS3 would not be there.

A one system world would eliminate a lot of the innovation and great developments that have come out this generation from both companies.

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