Forbes contributor Adam Hartung believes that Microsoft’s Xbox brand is in a downward spiral which could lead to massive layoffs or even a forced sale.
“The entertainment division will be spun off, sold to someone like Sony or possibly Barnes & Noble, or dramatically reduced in size,” Hartung says. “Unable to make a profit it will increasingly be seen as a distraction to the battle for saving Windows – and Microsoft leadership has long shown they have no idea how to profitably grow this business unit.”
According to Hartung, Microsoft will be hit with “enormous layoffs over the next three years” as it plows more and more money into fighting Apple and iOS.
“Microsoft makes more than 75 per cent of its profits from Windows and Office,” he added. “Less than 25 per cent comes from its vaunted servers and tools. And Microsoft makes nothing from its Xbox/Kinect entertainment division, while losing vast sums in its on-line division.”
“No matter how much anyone likes the non-Windows Microsoft products, without the historical Windows/Office sales and profits Microsoft is not sustainable.”
“Failure is already inevitable. At this stage, not even a new CEO can save Microsoft. Game over. Ballmer loses. And if you keep your money invested in Microsoft it will disappear along with the company,” he concluded.
While the points made are reasonably solid, he fails to point out that the Xbox 360 is currently the world’s most popular console on paper topping the units sold chart each and every month for the last two years, adding to this the potential release of a brand new console this year, I just don’t see how it could be failing.
Sure a lack of exclusives in 2013 is a little concerning, but it may simply be due to the fact that the majority are in development for the next generation Xbox. I personally think that unless Sony seriously buck there ideas up at the beginning of the next hardware cycle then Microsoft should be safe in the gaming market for a fair few years.
Do you think the Xbox brand is failing? Let us know in the comments below.