Microsoft to Pull out of Console market in 2014

There has been a recurring bit of chatter across the interwebs about Microsoft’s plans for the Xbox brand given that the division hasn’t been entirely profitable for the company (despite the brand becoming well recognized as a power player in the home entertainment sector). The latest bit of chatter has kicked up due to a lot of weight being added to the rumors about Microsoft selling off Xbox.

The Verge spotted an article on Bloomberg where they source individuals close to Microsoft’s inner operations that Stephen Elop, potential candidate for Microsoft’s CEO position to replace a retiring Steve Ballmer, would be keen on killing or diverting resources off wasteful divisions of the software (and minor hardware) giant.

As summed up in the Bloomberg article…

Elop would be prepared to sell or shut down major businesses to sharpen the company’s focus, the people said. He would consider ending Microsoft’s costly effort to take on Google with its Bing search engine, and would also consider selling healthy businesses such as the Xbox game console if he determined they weren’t critical to the company’s strategy, the people said.

This isn’t the first time this issue has come up regarding the sale of the Xbox division, but the reality strikes a heck of a lot closer to home given that once the rumor went wild Microsoft’s stock price skyrocketed at the prospect of the Bing and Xbox divisions being sold off, which could result in a hefty profit margin for the 2015 fiscal forecast.

More than anything, the launch of the Xbox One and whether it proliferates or profligates Microsoft ‘s marketing position will determine how much weight the rumors will hold. I imagine if someone like Elop saw a lot of strong consumer interest they might consider keeping the Xbox brand around a little while longer. However, if the launch is plagued with temperate sales andpoor consumer feedback, it could easily affect the Xbox brand’s market position and dampen the way people react and perceive Microsoft’s home entertainment gaming division.

Now this creates a rather interesting conundrum with a dichotomous approach from gamers on the potential dump of the Xbox brand by Microsoft.

On one side, gamers feel that Microsoft needs to keep the Xbox brand in order to keep the industry competitive and force Sony to stay innovative, consumer-friendly and feature-savvy, if not forward-looking with staying relevant with their services and devices. Many gamers fear that Microsoft selling off the Xbox brand where it becomes nothing or loses its prestige under a smaller company it could force Sony back into the early dark days of their PS3 mentality. On a personal note, I’m not sure why people don’t think Nintendo would keep Sony competitive? But oh well.

On the other side, some gamers feel that Microsoft effusing the Xbox brand could be good for the industry, opening the door for a potentially better competitor to step up and try their hand at the gaming industry. This viewpoint isn’t a bad one and it would be interesting to see who might enter the competitive home entertainment console space, although technically that’s sort of what Valve is about to do with the Steam Machines.

Right now, though, gamers need not worry too much until an official successor to Ballmer is announced and their intentions are made readily clear. Until then, enjoy the ride while it lasts.

Microsoft dropped the Ball.

Every time any MS representative goes on the record to discuss the DRM policies they take an inherently anti consumer approach even if it’s not their intent. Which at this point I’m going to assume it’s their intent given the frequency with which they and their cohorts put this bungle on the consumer. You can’t claim that consumers weren’t ready for your vision of the future. We will never be ready for your vision of an all digital future because no one at MS has never, not once, made it clear what exactly that vision is, or was, could be or will be.

Simply state that Microsoft misread the market. They operated in a vacuum under the assumption that your consumers wanted certain things that we didn’t and now they’re having to back track. That’s fine. Evil Corporations make mistakes, it happens. It’s time to reread your audience and try again. What they can’t do is continue to allude to the fact that consumers weren’t ready for their product. That’s insulting, and it insinuates that Microsoft still have plans to fuck us over in the future. Consumers are naturally entitled. We have to be. We’re paying large sums of cash, in this case a premium, for their product. We have certain expectations based on how they present that product and once that transaction is complete we’re naturally entitled to complete ownership over that product. We also have expectations for the product based on competing products and services from other manufacturers. Microsoft does not operate within a vacuum and this relationship does not work in reverse. You are not entitled to my money.

The DRM strategy as we know it is beneficial to no one but Microsoft and its partners. This statement is true based on the information you have given us. They can claim that miscommunications and disorganization led to dissemination of inaccurate rumors, but the truth of the matter is that the only time they’ve detailed any consumer benefit was AFTER they shut the DRM down. We also had it on good insider authority that those claims regarding game sharing were complete bullshit and they were lying to us. All the “facts” they attempted to detail to consumers were completely contradictory during the period of time immediately following the initial announcement. Every further clarification only led to further confusion as Microsoft continued to contradict itself. Repeatedly. These are not signs of miscommunications. These are signs of a critical lack of vision and fundamental misunderstanding of their target audience and it shows.

Right now Sony and Valve are assaulting Microsoft with precision strikes in the market that matters the most during launches, the core gamer audience. You need to buckle the fuck down and figure out what your product is, and who it’s for. Right now I can’t figure out who this product is for, or why anyone should want it. If it’s for the hardcore gamer what are the benefits of paying for XBL over PSN+? You’re entering a new generation and Sony is catching up significantly. Voice chat is no longer an appropriate answer. You’ve failed to clarify on the future of the Games With Gold promotion. At first it was temporary, now it’s not? The offerings have been substandard when compared to PS+ over the period of time since it was first announced. Your product is no longer the preferred place to play multiplatform titles and you have virtually no first party resources to draw from. The last entry of your largest IPs, Halo and Gears, was not received well by their audience and Microsoft lost a chunk of their third party exclusive content over the past generation. As a consumer why should I believe that this won’t happen again? Why should I, as a gamer, buy a Xbox One when judging by their track record they’ve nearly abandoned the 360 halfway through it’s life and let a massive series like Mass Effect go multiplatform. It seems to me like this will probably happen again and most major titles I can just wait for on Steam or PS4.

Is this for the casual gamer? If so why aren’t we seeing more kinect games? If so why is it the most expensive console on the market? Where is the content that’s going to blow the casual market away? The original kinect was successful because it was a novel add on. A new way of interacting with a product you already had in your household. This is not the case for Microsoft any more. The original Wii took off because it was something entirely new, original, and extremely affordable. It was a novelty. This is also not the case for the Xbox One. The family/casual market, if there’s much of one left, is going to Nintendo. They have the stronger family friendly IPs. You either need to focus on them or drop the kinect.

Is this a device for the mass market? Designed to integrate into television and media services? It can’t be, once again it’s the most expensive console no the market. It can’t compete in price to something like the Apple TV, Roku, Chromecast, or even the Vita TV, a device that at least makes sense as a cheap complimentary purchase to a product a consumer will already own. If that’s the case then why haven’t we heard more about these television and film products? Where is the info on Remedy’s new game that’s supposedly blending video games and television entertainment? We know virtually nothing about how it plays, and we know virtually nothing about the television series. Are there other projects like that in the works? If it’s designed to compliment a cable subscription why can’t it function as a DVR? What benefit is there to a $500 black box that functions as little more than a glorified TV remote? Why aren’t you partnering with cable providers? Why are the TV services so severely limited globally?

Microsoft, who is this product for? On the surface you seem to be approaching this device as a jack of all trades type of console. The problem is that the title of “jack of all trades” implies a level of competency in these services that is glaringly absent from your strategy. You lack vision. Period. Stop making excuses. Stop blaming the consumers.

Shut the fuck up, buckle the fuck down, figure out who you’re targeting, and fix this.