Forbes Analyst Calls Game Over For Microsoft

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Forbes Analyst Calls Game Over For Microsoft

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Xbox could be sold to Barnes & Noble, says Forbes contributor Adam Hartung.

"Sell Microsoft NOW!" is the advice Forbes analyst Adam Hartung is giving readers of his column. According to Hartung, the Xbox maker's hope had been that the Christmas season would see a slow-down, or even reversal, of the trend towards Apple and Android products; but that didn't happen, so now Hartung's saying it's Game Over for the company.

"Expect enormous layoffs over the next 3 years," Hartung claims. "Something like 50-60%, or more, of employees will go away." But that's not the half of it. Microsoft's entertainment division - the folks who make Xbox and the Kinect - are dead weight, in Hartung's analysis, since whatever cash they rake in is outweighed by the cash spent on keeping them afloat. Dead weight will be the first to be jettisoned when Microsoft starts trying to save itself.

"Unable to make a profit [from entertainment]," says Hartung, "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." Hartung expects Xbox to be sold off to some other company, perhaps even Barnes & Noble; if not sold, it will be drastically reduced in size.

It's not a pretty picture Hartung's painting. Microsoft used to dominate the market, but now people buy tablets, not desktops, and Surface didn't make a dent in Christmas sales numbers. Nor do Microsoft's customers upgrade their desktops as often as they used to; 40% of Microsoft's user base is sticking with Windows XP, a heavy blow for a company that just brought out Windows 8.

"The declining sales," Hartung says, talking about the future of Microsoft, "and lack of customer interest will lead to a tailspin at Microsoft not unlike what happened to RIM. Cash will be burned in what Microsoft will consider an 'epic' struggle to save the 'core of the company.'" But, if Hartung is right and momentum has swung irreversibly towards Android and Apple, whatever Microsoft does at this point won't change a thing.

Source: Forbes

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So what you're saying is, no more Halo? NOOOOOOOOOOOOOO!!!!!
In all seriousness however, I really hope this doesn't happen as I would really like to see the next few Halo games. As well as the fact I have quite a bit of cash invested in my 360.

This seems against all the other reports I've read about Microsoft recently but then I'm not an industry analyst.

Same manbo jambo of the Windows Vista era. What did they do? Launched Windows 7!
If Windows 8 is not hot enough guess what they will do?

None of that report makes sense. This is MICROSOFT we're talking about here.

Don't worry, I'm sure all that extra money you make from forcing developers to distribute through the Windows Store will cover the losses ~_~

But I'm pretty sure the Xbox 360 started turning a profit some time ago.

40% of Microsoft users still use XP? Does that exclude businesses or something?

Wouldn't surprise me. Microsoft seem to care less and less about actual gaming with each passing day.

The guy sounds almost like an apple fanboy with such unrealistic stuff. Consoles have always moved in waves. Consoles age, and then their developers are re-assigned to new activities. Same for the Xbox.

And bash windows all you like, I take a rather dim view of some of the recent developments since XP myself and would prefer not to use Windows 8. But people are still buying it. I got windows 7 on this machine myself. It's most convenient, quite simply.

I'd write this off as 'desperate columnist needed spectacular headline'.

GenGenners:
None of that report makes sense. This is MICROSOFT we're talking about here.

I don't think he's that far off about Microsoft (they're probably going to follow IBM at some point in the near-to-far off future), but I don't believe hedging on Apple or the "Tablet market" makes sense, since I see both of those going the same way in the coming decades.

This is a rather long and interesting article about how and why "Microsoft lost its Mojo" that's definitely worth reading: http://www.vanityfair.com/business/2012/08/microsoft-lost-mojo-steve-ballmer

GenGenners:
None of that report makes sense. This is MICROSOFT we're talking about here.

Some of it does make sense, at least from a Windows platform POV. Microsoft hasn't been the same, financially and publicly, since Apple started to become the big contender it never had to fight against but also when Vista came out. Companies didn't upgrade to Vista on the mass scale it was expecting and thus we had Windows 7. Now, and only now, do I see the place I work for transition to Windows 7, a generation (four years) behind the current Windows OS. Even the state's main hospital, a stone's throw away, still has many computers running on Windows XP (three generations behind) with only a few, the newest ones that hold the medical records, running Windows 7.

Corporations have always been the lifeblood of Microsoft, not the Xbox, and they are constantly losing on that front. And it's not really to competition, it's to their own hubris that everyone wants the new Windows OS.

Of course, this opinion article from Forbes isn't talking about Microsoft going bankrupt, only downsizing.

redknightalex:

GenGenners:
None of that report makes sense. This is MICROSOFT we're talking about here.

Some of it does make sense, at least from a Windows platform POV. Microsoft hasn't been the same, financially and publicly, since Apple started to become the big contender it never had to fight against but also when Vista came out. Companies didn't upgrade to Vista on the mass scale it was expecting and thus we had Windows 7. Now, and only now, do I see the place I work for transition to Windows 7, a generation (four years) behind the current Windows OS. Even the state's main hospital, a stone's throw away, still has many computers running on Windows XP (three generations behind) with only a few, the newest ones that hold the medical records, running Windows 7.

Corporations have always been the lifeblood of Microsoft, not the Xbox, and they are constantly losing on that front. And it's not really to competition, it's to their own hubris that everyone wants the new Windows OS.

Of course, this opinion article from Forbes isn't talking about Microsoft going bankrupt, only downsizing.

I couldn't agree more. As it stand, some of our systems in my company still use XP and we only this year transitioned the entire field over to Windows 7. This brings up an interesting debate I had with another person on these forums actually. I think it had to do with MS had mentioned plans of trying to switch to a yearly OS upgrade model. It was honestly completely ridiculous as so many companies are multiple generations behind. Upgrading infrastructure OS's all the time is almost an impossibility when you have so many core system components that may not be compatible right away.

I think we can all agree that MS needs to be knocked down a few notches. The miss steps they make at this point tend to be pretty substantial. Though some of the analysis on this particular report are pretty damn off, in my opinion. As of right now, it looks like they are going to be announcing a new XBox this year, which most likely means planned losses after release for a few years to come, like the last one. They will either learn from their OS mistakes or not. You don't only have the corporate side not upgrading with new releases, though that should be their primary concern. The only people who tend to get the newest Windows on the homefront seems to be people buying new computers. If you don't do that regularly or build your own, there is no reason to upgrade. You also have these big pushes to other OS's on the gaming side. One being Mac of course. But I don't personally know too many gamers who like Apple products.

The next few years should prove interesting, one way or the other.

Barda236:
So what you're saying is, no more Halo? NOOOOOOOOOOOOOO!!!!!
In all seriousness however, I really hope this doesn't happen as I would really like to see the next few Halo games. As well as the fact I have quite a bit of cash invested in my 360.

They'd likely sell off the IP and related studios to generate cash in this situation, so there'd probably still be Halo.

OT: Meh, I don't care for Xbox and I can live with using alternatives to windows.

Dexter111:

GenGenners:
None of that report makes sense. This is MICROSOFT we're talking about here.

I don't think he's that far off about Microsoft (they're probably going to follow IBM at some point in the near-to-far off future), but I don't believe hedging on Apple or the "Tablet market" makes sense, since I see both of those going the same way in the coming decades.

This is a rather long and interesting article about how and why "Microsoft lost its Mojo" that's definitely worth reading: http://www.vanityfair.com/business/2012/08/microsoft-lost-mojo-steve-ballmer

Reading the article now. Pretty mind-blowing.

I have heard that Microsoft is dying rhetoric for the past 10 years. Yet they are still around.....

Fasckira:
This seems against all the other reports I've read about Microsoft recently but then I'm not an industry analyst.

Be glad about that. Industry and stock analysts as well as consultants are basicle the furuncle onb the arse cheecks of society. A german cabaret artist named Vollker Pispers said the following about them: "Consultants. Eunochs. They know how to do it." I find that rather fitting.

The great thing about them is that someone among them is always right because three analysts have about 12 opinions about one thing. The odds are in their favour.

Fappy:
40% of Microsoft users still use XP? Does that exclude businesses or something?

I know I still use XP though I might get windows 7 later this year.

OT: Personally I don't think it'll die, Apple sucks so hopefully things will turn around.

IF he is right, which for the record I don't think so, I think he is way far in the future I don't think that apple holds enough of the computer market to make a devastating threat and windows phones are relatively new as well. I think that history is just repeating its self and some guy who happens to have a lot of money just knows that launching a new os and a new system will be a big financial wallet punch but in about 2 years they will be making money again and when the next console generation last 12 freaking years this time around I think the developer money will be just fine for holding xbox together.

but what do I know im just a tech savvy consumer who knows what all of his friends buy and know that xbox is the more popular console in my part of the states, vs some guy who probably bouught an apple because it was cool and and just updated his myspace page with his new about me colum listed under his contributor profile.

Too much use of buzzwords!!!

xxBucdieselxx:
I have heard that Microsoft is dying rhetoric for the past 10 years. Yet they are still around.....

Yes, they're still around, but in a significantly weaker position than they were 10 years ago. It's unlikely Microsoft will "die" altogether.

I'm calling bullshit man person. The words spewing out of your mouth are INSANE!

People have been calling the death of Microsoft for years now. But, with their huge market share in the computer market, combined with the sales they've gotten on a console that's been going strong for 7 years now, I think it's safe to say they're fine for now.

I pretty much stopped paying attention when the guy claimed that people were buying tablets instead of desktops. No, you idiot. People are not replacing their desktops; they are(with some few exceptions) using tablets as well as their desktops. And if it seems that tablets are outselling traditional PCs(and I've no doubt that they are), it is only because they are being developed and marketed in competition with smartphones, which are typically replaced every year or so, rather than the 4-5 year cycle most people run with for PCs.

Basically, smartphones sell well right now because a 2 year old tablet has a lot more problems with new software than a 2 year old PC. The tech is advancing more rapidly because it is still trying to catch up with x86.

I'm not in a position to predict the market as a whole. But I will say: I don't want to spend the rest of my life working on an under-powered tablet. I don't want to see companies like AMD, Intel, and Nvidia go out of business. So I certainly hope Hartung is blowing smoke.

Microsoft seems increasingly determined to make its interfaces "elegant" in pursuit of Apple without any consideration that their so-called "elegance" is literally a bane to many of their core customers. It may require a savage beating to get that lesson through the necessary heads, but it shouldn't require a fatal one.

Okay, I'm squarely in the Apple/Mac user camp, but this kind of analysis is pure BS; it seems positively preposterous to me, and I refuse to just believe such analysis based on one small segment of Microsoft's total business. The sad thing is, this is precisely the kind of faulty, shallow thinking that goes on all the time with tech-news concerning tech-businesses. Microsoft is far too large and still massively dominant on the desktop and in the enterprise to just vanish so quickly.

Honestly, this sounds to me like the typical stunt of some Wall Street analyst with a vested interest in having the stock of a specific company take a sudden nose-dive so he can swoop in a buy it all up cheap and then profit later when the stock returns to normal value. To accomplish this, he'll release some bullshit article with a page-view grabbing headline to create FUD in less savvy investors, who then proceed to sell their stock in the company, lowering the stock price. With the stock lowered, he'll then buy it up, and when the "inevitable" doom fails to materials (as always ends up being the case), he'll make a killing selling the stock back to those same naive investors who are now desperately trying to grab a piece of the pie before it's all gone.

The other possibility is that his publication is in desperate need of some revenue from page-hits (been a strong trend with publications like Forbes and Business Insider over the past couple of years) and creating another BS article about Apple isn't working as well anymore (only so many times you can keep crying "wolf" before everyone just starts ignoring you). So, creating a BS article about the imminent doom of Microsoft had more possibility to generate a new wealth of page-hits, thus generating ad revenue.

This kind of bad, hidden-agenda analysis runs rampant in the tech-press, and it is usually aimed at Apple, because it's so easy to grab eyeballs off the Internet by putting Apple in the headline. This is the first I've seen it aimed at a non-Apple company. It's bad analysis when aimed Apple, and it's bad analysis when aimed at Microsoft. It's bad analysis when aimed at any company at all, because it's just purely bad analysis. Unless I hear Microsoft is actually losing significant (like 20-30%) mind-share, market-share, and site-licensing in the desktop OS, server OS, Office product space, and enterprise platforms space, any statements to Microsoft's sudden demise will be held as incredulous and suspect to complete disbelief as being nothing more than pure bullshit that has been uttered by either some delusional, ignorant tech pundit/blogger or some Wall Street/corporate dweeb with an hidden motive.

Xan Krieger:

Fappy:
40% of Microsoft users still use XP? Does that exclude businesses or something?

I know I still use XP though I might get windows 7 later this year.

OT: Personally I don't think it'll die, Apple sucks so hopefully things will turn around.

I know I used XP until last year when I got a new PC with Windows 7 pre-loaded. I completely skipped Vista and I see little reason to drop the immense expensive of getting windows 8 until I get a new computer in 2-4 years.

Fappy:
40% of Microsoft users still use XP? Does that exclude businesses or something?

No that include business, actually business is the main reason the number would be so high, since lot of them are basically stuck with software programmed for windows XP (which was a really bad idea to get in the first place, has windows XP was basically a consumer reiteration of Windows 2000, to compensate for the ship wreck that was ME), that the development team has no yet updated to anything newer, despite XP going out of support next year.

This guy seriously thinks this? I hate MS with all my being and even I can prove that they won't die soon. Nevermind that MS cares less abo-...

j-e-f-f-e-r-s:
Wouldn't surprise me. Microsoft seem to care less and less about actual gaming with each passing day.

Well, I'm beaten there. An interesting point to make is that they seem to care less about developers as well. I'm not going to bend down to MS and make Facebook squares. Hell no!

GenGenners:

Dexter111:

GenGenners:
None of that report makes sense. This is MICROSOFT we're talking about here.

I don't think he's that far off about Microsoft (they're probably going to follow IBM at some point in the near-to-far off future), but I don't believe hedging on Apple or the "Tablet market" makes sense, since I see both of those going the same way in the coming decades.

This is a rather long and interesting article about how and why "Microsoft lost its Mojo" that's definitely worth reading: http://www.vanityfair.com/business/2012/08/microsoft-lost-mojo-steve-ballmer

Reading the article now. Pretty mind-blowing.

Reading it now as well. Pretty cool, but I should check to make sure that the facts are correct. I'm getting a feeling that something's off.

Fappy:
40% of Microsoft users still use XP? Does that exclude businesses or something?

Unfortunately, no. The number one reason for this is price. Windows 7 Professional is damned expensive coming at 200 USD a single license. No, Office is not included. XP also wasn't as bad to set up as Windows 7 is at times due to special limitations that businesses need to set. My dad's company just switched to 7, and they're still having trouble getting virtual desktops to function.

I really wonder what sort of universe these people live in, MS owns half the bloody software market you numpties, and in the western world it goes the same for the console market.

Look I'm no fan of their power drunken ways either but have a little perspective.

iniudan:

Fappy:
40% of Microsoft users still use XP? Does that exclude businesses or something?

No that include business, actually business is the main reason the number would be so high, since lot of them are basically stuck with software programmed for windows XP (which was a really bad idea to get in the first place, has windows XP was basically a consumer reiteration of Windows 2000, to compensate for the ship wreck that was ME), that the development team has no yet updated to anything newer, despite XP going out of support next year.

I guess I am just too used to working in the software industry where they generally like using up-to-date tech... except for Microsoft Outlook >.>

I sold my few stocks the same day they announced Windows 8 and the first drop spike happened. I got my money back that was for sure but that was about it.
I am not buying any stocks tied to Microsoft long as they think Windows 8 is the next step in computing.

Hell my office (in which I work) had 2 computers with Windows 8 in them (pre-installed, we got them cheap so we didn't complain) and the fucking thing was useless barely anything worked on it, for some reason it took 100G (1/10th) from the SATA and 62G ( 1/3rd) from SDD drive and we couldn't uninstall the fucking thing and change them to windows 7. The fucking OS was like a parasite, we couldn't get in to bios and when we did the fucker didn't let us boot from Windows 7 install disks. So me and one Pete from Interface design banded together and spent 4 hours (2/3rd) of our work hours getting rid of the damn OS. Finally we did manage and installed 7 and got them working in ~20 minutes.

That was enough for me about Windows 8 and convinced me that when Gabe said that they start focusing on Linux based systems in the future - he was bloody fucking right.

Also who smartass fucking engineer thought it would be good idea to force touch pad controls on to OS that is designed to computer WITHOUT TOUCHPAD. And then force it to be on always...

But yeah I am sticking to XP and 7 until Microsoft stops trying to be Apple and makes the Windows 9 a real OS for tower computers.

But yeah all private stock owners of Microsoft I recommend you to sell also. They'll notice some point... If anyone bothers to buy them soon.

geizr:
Okay, I'm squarely in the Apple/Mac user camp, but this kind of analysis is pure BS; it seems positively preposterous to me, and I refuse to just believe such analysis based on one small segment of Microsoft's total business. The sad thing is, this is precisely the kind of faulty, shallow thinking that goes on all the time with tech-news concerning tech-businesses. Microsoft is far too large and still massively dominant on the desktop and in the enterprise to just vanish so quickly.

Honestly, this sounds to me like the typical stunt of some Wall Street analyst with a vested interest in having the stock of a specific company take a sudden nose-dive so he can swoop in a buy it all up cheap and then profit later when the stock returns to normal value. To accomplish this, he'll release some bullshit article with a page-view grabbing headline to create FUD in less savvy investors, who then proceed to sell their stock in the company, lowering the stock price. With the stock lowered, he'll then buy it up, and when the "inevitable" doom fails to materials (as always ends up being the case), he'll make a killing selling the stock back to those same naive investors who are now desperately trying to grab a piece of the pie before it's all gone.

The other possibility is that his publication is in desperate need of some revenue from page-hits (been a strong trend with publications like Forbes and Business Insider over the past couple of years) and creating another BS article about Apple isn't working as well anymore (only so many times you can keep crying "wolf" before everyone just starts ignoring you). So, creating a BS article about the imminent doom of Microsoft had more possibility to generate a new wealth of page-hits, thus generating ad revenue.

This kind of bad, hidden-agenda analysis runs rampant in the tech-press, and it is usually aimed at Apple, because it's so easy to grab eyeballs off the Internet by putting Apple in the headline. This is the first I've seen it aimed at a non-Apple company. It's bad analysis when aimed Apple, and it's bad analysis when aimed at Microsoft. It's bad analysis when aimed at any company at all, because it's just purely bad analysis. Unless I hear Microsoft is actually losing significant (like 20-30%) mind-share, market-share, and site-licensing in the desktop OS, server OS, Office product space, and enterprise platforms space, any statements to Microsoft's sudden demise will be held as incredulous and suspect to complete disbelief as being nothing more than pure bullshit that has been uttered by either some delusional, ignorant tech pundit/blogger or some Wall Street/corporate dweeb with an hidden motive.

That was a great post my friend.

I really think this analyst is dramatically overstating his case. It actually reminds me of one of those forum trolls who push their trolling too hard and they come off sounding silly, because everybody can see they are just trolling.

But Microsoft is so big!!! So there is no way that it can get any smaller!!!

Chatboy 91:
I'm calling bullshit man person. The words spewing out of your mouth are INSANE!

People have been calling the death of Microsoft for years now. But, with their huge market share in the computer market, combined with the sales they've gotten on a console that's been going strong for 7 years now, I think it's safe to say they're fine for now.

Going strong? Hello no. MS 7 years ago was on top. They've been reporting massive losses for years now. That and the sales of their OS have been severely kneecapped since Vista.

Just because people say that a company has been dying for years doesn't mean they aren't hurting if they're still around. When people say things like that, they don't mean immediately, they mean like a terminally ill person.

In my opinion, Microsoft never had any idea on what they were doing. Spending money on timed exclusive titles (Skyrim DLC) was stupid. They think it would make more people to buy Xbox to get the games on release day. Instead they just wait for the timed exclusive to run its course and buy it on PC anyway. Nobody was ever going to buy an Xbox because of this, it just pisses people off and shows Microsoft has no clue.

Then Windows 8, which is nearly universally derided, comes out and falls flat. It's not the must have like Windows 7. Its like they are looking at everyone else and copying them. First they copy Sony, then they copy Apple. Its not working, come up with your own ideas, if you have any.

And the PC Gaming Master Race shall laugh incessantly as they watch Microsoft pay the price for alienating them.

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