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$2 Billion Microsoft Investor Wants to Fire Ballmer, and sell the Xbox Division


Microsoft CEO Steve Ballmer had announced the will be retiring as CEO within the next year, but that is not fast enough for ValueAct, who own a 1% claim in firm. More details past the link. 

Via Eteknix:

Long-term Microsoft analyst Rick Sherlund claims that big changes are going to take place very soon as other Microsoft shareholders support the decision to get rid of Steve Ballmer – in addition to the investment group ValueAct. According to the report ValueAct are seeking to replace Steve Ballmer because his strategy “inspires little confidence” in shareholders.

Apparently Microsoft has no choice but to give ValueAct a seat on the board otherwise they may launch a “public war” on Steve Ballmer and Microsoft which could end with serious turmoil at Microsoft.

“A decision by the board at Microsoft to offer a nomination for a board seat could keep the activist agenda behind closed doors and take longer for shareholders to see potential benefits” stated Sherlund.

Furthermore, it is believed they might target the Xbox division and try and get rid of it altogether. This would allow Microsoft to focus on other products and mainly Windows.

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

That last quote is telling because I’ve been saying this for a long time. Microsoft and Sony’s gaming divisions don’t make much. They pour resources into super power machines, sell them at huge losses, then pay 3rd parties millions of dollars for exclusive maps or a couple of missions.

It’s a destructive behavior that does not bring long-term stability to the gaming industry. It just creates skepticism, and irrational behavior by companies (EA, Konami, Bethesda)

Yo Pachter the “Xbox is cool, but by our estimates Microsoft has not made money at this”

The Pach-Attack’s bias bleeds through his shirt! How can one analysts say Microsoft is so great and Nintendo should leave the console space, when the other ones say aren’t even making money? And remember, Rick Sherlund is a ‘long-term Microsoft analyst,’ so I think he knows more about Microsoft’s financials than the fortune teller Pachter.

Thanks Maestro for the tip!

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  • The decision of Microsoft Investors in firing Ballmer is for the good of the company and also for their own good. Well, that's their choice.

  • *NormalGamer*

    “Who knows, maybe Sega will make another attempt, though I still think they and Nintendo should just join forces and put out a joint console together.”

    Now ‘that’ I would be comfortable with; with the right philosophies, that is; two of the biggest names in video games joining forces on one console.

    Then again, we can dream. ^_^

    • Dusklurker

      What would be good about them going together to make a console? I don't understand how that would be good. Any time multiple companies have went together to create a console it has always ended badly. Usually because the two companies want different things out of it. Competition is actually a good thing. It helps both parties strive to be better.

      • *NormalGamer*

        “Competition is actually a good thing. It helps both parties strive to be better.”

        Only if it’s ‘self-competition’ (self-improvment) rather than competing to be better than somebody else (that type of competition is just simply for ego-stroking).

        And also what vanfokerdumplestein said.

  • vanfokerdumplestein

    Microsoft are a complete joke and should just drop out of the videogame business altogether. Frankly, I've never taken them seriously, because all they want to do is dominate every industry they get a foothold in. They care nothing about the games or those who play and enjoy them. For those who use the "competition is good" excuse, it only applies when the competition in question is actually doing things to push the industry forward in a positive way, like what Nintendo constantly does. Can you say to me with a straight face that this is what Microsoft's been doing all this time, especially with that disgrace of a console known as the X-Box ONE? I thought not. The sooner Microsoft exits, the sooner someone better can come in and take their place. Who knows, maybe Sega will make another attempt, though I still think they and Nintendo should just join forces and put out a joint console together.

  • GeneralBrown178

    Shit just got real.

  • *NormalGamer*

    “That last quote is telling because I’ve been saying this for a long time.”

    Indeed. Shocking, isn’t it?

  • Dusklurker

    Maybe they should simplify. I don’t know if it would be good for gaming if Sony, MS, or Nintendo left the industry.

    • Matthew Wesley

      Considering what Microsoft did to Rare, the xbox brand could die a thousand deaths and it still wouldn't be enough. For giving us Halo, which spawned the generic regurgitated shooter repeated ad nauseum phase, they should be destroyed. For monetizing services that you already payed for (see xbox gold) they need to be sent into oblivion. For shipping a console that they knew was more than likely to break, then putting owners of said console through the fourth degree to replace it, then finally saddling them with the bill… I could go on, but it would take too long…. Let me put it this way, the xbox hasn't yet earned it's ticket in this industry. Nintendo earned theirs when they saved the industry back in the eighties, and Sony earned theirs in the ps1 era. Ultimately, I hope either xbox is forced to do a radical overhaul or just get out of the business. Console manufacturing is for making toys, if you don't want to make a toy, get out of the business.

      • Dusklurker

        I get what you are saying lol. I really do. The Rare thing, well… They bought it and the core dev group moved on. Not much that MS could have done about that really. It could have been the same with any company/group that had purchased it. Rare wasn't doing all that well with Nintendo at the point when Nintendo sold them, that's the reason they sold them. As for Halo, well, really they just kinda copied Doom but with a sci-fi twist instead of just ripping it off. Hell look at Master Chief and Doom Guy. But despite that Halo was a decent game, and as far as I'm told the sequels have been as well (haven't played them). FPS genre would not be nearly as generic and regurgitated if it weren't for COD. MS has always had really shitty customer service and that was reflected with with their handling of customers with their dead boxes.
        I wish sega were still making a console instead of MS without a doubt, but unfortunately that isn't the case. I still believe that loosing any part of the gaming industry is a bad thing for the industry, unless someone else steps up to take it's place, like MS did with Sega. Hell, maybe Atari should try again lol. Or SNK again, they made a good console when they did. Completely over looked but they did put their fair share of first party support for it even though most of it was a rip off of something else, some was still very good.

    • Aiddon

      It wouldn't be. Fact is, ANY of the major console makers or 3rd parties (such as EA, Activision-Blizzard, Take-Two, Ubisoft, etc) folding or getting out of the gaming industry would cause a LOT of economic issues. The industry wouldn't collapse, but it would be enough to essentially cause a mini-crash. Kinda like how despite not having a crash like back in 1929, there have been several, smaller crashes since then. THQ should have been a warning sign, but it's gone ignored because you have arrogant 3rd parties thinking that it can't hit them or that the gaming industry will always expand. Considering that Gamestop is thinking that the overall userbase for the 8th gens will be 80-85% of what their predecessors' were, I think some people are in for a kick in the ass.

      • Dusklurker

        Completely agree. Gamestop needs to take their heads out of their asses and maybe start becoming competitive with the game selling business, and maybe attempt to create a bit of an online store as well.
        I still hope EA goes under though. They are a terrible company with terrible laurels, lack of business ethics, and haven't produced any real quality products in a long time. Plus since they are one of the largest companies it might actually make a statement if they were to go under (please, please, please) and other might take notice like the didn't with THQ.

        • Aiddon

          nothing good would come out of EA folding. Thing is, a LOT of people would be out of jobs and a lot of properties would go with them. Nine-thousand people out of work wouldn't be good, and that's before you get into the fact that the company is worth billions thus creating more holes. I always hope for better management, but demanding a company fold is just childish, petty, and mean-spirited.

  • Matthew Wesley

    Microsoft makes it's money from adverts and gold memberships…. games are secondary. So…. yeah. Microsoft is in serious trouble, because I strongly doubt their going to be making as big a splash as people think.

    • RicardJulianti

      It's funny because with all of the ads and Gold memberships….Microsoft still hasn't turned a net profit on the Xbox brand. I mean…..the lost billions getting the original Xbox up and running…and then lost a few billion more with the 360.

      • Matthew Wesley

        Well then, I guess they are well and truly f'd.