Goldman Sachs: Xbox Division Should be Spun Off

October 6, 2010 -

A Goldman Sachs analyst (whose company was saved by taxpayers, for the record - you're welcome) says that Microsoft should spin off its Xbox division and downgraded Microsoft share recommendations from buy to neutral. In a new report, Goldman Sachs said that "A break-up of the consumer businesses could potentially unlock hidden value, or more discipline on cost could turn the businesses into contributors to profitability and shareholder value."

Goldman Sachs: Microsoft should split off 'unprofitable' Xbox dept. Analyst Goldman Sachs has downgraded Microsoft share recommendations from 'buy' to 'neutral', and suggested that one way to resolve the firm's apparent difficulties is to split off its consumer entertainment division.

Goldman's Sarah Friar added that "The Xbox products could be an appealing stand-alone entity, given the historical success of the Xbox and the products' brand strength, and the business could show unlocked value with forced cost discipline compared to as a piece of Microsoft."

Other analysts strongly disagree with the assessment: "Pulling this off would be like Microsoft learning Geller-ian magic tricks, the equivalent of being able to bend spoons with its brain," said investor Paul Kedrosky.

Finally, analyst Matt Rosoff told ComputerWorld: "I think it's silly to spin off a profitable business. Xbox would lose more than it would gain by going it alone." Rosoff felt that the company would be better off carving its search business, due to the complexities of competing with Google.

Source: GI.biz

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Comments

Re: Goldman Sachs: Xbox Division Should be Spun Off

Dude, James...sorry to be a downer, but you really need to proofread your posts.  You've got a typo in almost every sentence ("you're welcomed", "In a new report from Goldman Sachs said that", that entire weird second paragraph that restates what's said in the first paragraph in a run-on sentence, "Other analyst strongly disagree with the assessment").

It's a good story, but it looks like you were really in a hurry when you put it up.  Take a minute to check your work before you hit that Post button.

Re: Goldman Sachs: Xbox Division Should be Spun Off

was supposed to be a reply...

 

Re: Goldman Sachs: Xbox Division Should be Spun Off

LOLWUT  This "analyst" doesn't understand anything about Microsoft and Xbox.

Pwnage of Empires Xbox 360 Indie RTS

Re: Goldman Sachs: Xbox Division Should be Spun Off

Yes, I'm sure one of the most successful companies in history is going to take the advice of one that had to be BAILED OUT BY TAXPAYERS!

Sorry, but that's just a LOT of fucking nerve right there. Jack Thompson-sized nerve, you know?

Re: Goldman Sachs: Xbox Division Should be Spun Off

Yeah... I don't see it.

Spinning off would be a great way to make some bankers some money, but I can not picture how it would do anything positive for Microsoft.

Re: Goldman Sachs: Xbox Division Should be Spun Off

100% accurate comment

Re: Goldman Sachs: Xbox Division Should be Spun Off

Yes, let's listen to the people known for falsely raising the value of their own stock.  Sure, Microsoft could probably burn their reputation into the ground and make a few bucks.  But who will bail them out when they eventually realize their stock is worth nothing and collapse?  They can't go crying to the government like Goldman did.

Bill Gates has done something Goldman has failed to do.  He has become richer than god, all the while establishing a brand that actually is worth something.  Goldman should keep their suggestions on "smart" business practices to themselves and leave business to the people who are actually good at it.

Re: Goldman Sachs: Xbox Division Should be Spun Off

I'm inclined to agree with Matt Rosoff here.  Microsoft letting go of the strong brand name and Xbox losing Microsoft's support would hurt both sides of the divorce if it went through.

 
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E. Zachary KnightGot that same recommendation on Twitter. So I guess that is a good sign.09/15/2014 - 8:39pm
prh99Portlandia, though I don't watch a lot of sitcoms. Heard it was good though.09/15/2014 - 8:02pm
E. Zachary KnightSitcom recommendations for someone who like Parks and Rec but hates The Office: Go.09/15/2014 - 6:08pm
NeenekoEven if they do change their policy, they can only do it moving forward and I could see the mod/pack community simply branching.09/15/2014 - 12:50pm
Michael ChandraAs for take the money and run, the guy must have a networth of 8~9 digits already.09/15/2014 - 10:33am
Michael ChandraMe, I'm more betting on some form of mod API where servers must run donations/payments through them and they take a cut.09/15/2014 - 10:32am
Michael ChandraEspecially since they want it for promoting their phones. Killing user interest is the dumbest move to make.09/15/2014 - 10:32am
Michael ChandraGiven how the EULA actively allows for LPs, I'm not sure Microsoft is ready for the backlash of disallowing that.09/15/2014 - 10:31am
Matthew Wilsonthey wont do that, the backlash would be too big.09/15/2014 - 10:25am
ConsterSleaker: how is that a flipside? Sounds to me like that's basically what Notch himself said, except rudely.09/15/2014 - 10:18am
MaskedPixelanteOn the plus side, no more lazy Minecraft LPs, since iirc Microsoft has a strict "no monetization period" policy when it comes to their stuff.09/15/2014 - 10:13am
james_fudgeBut it continues to sell on every platform it is on, so there's that09/15/2014 - 10:09am
james_fudgeOh, well that's another matter :)09/15/2014 - 10:08am
E. Zachary KnightNothing against Notch here. I think it is great that he made something so cool. I just can't understand how it is worth $2.5 bil09/15/2014 - 9:59am
InfophileWhat a world we live in: Becoming a billionaire was the easy way out for Notch.09/15/2014 - 9:42am
james_fudgelots of hate for Notch here. I don't get it. Sorry he made a game everyone loved. What a monster he is!09/15/2014 - 9:37am
SleakerOn the flipside, Notch has been a horrible CEO for Mojang, and the company has grown on sheer inertia, DESPITE being mishandled over and over.09/15/2014 - 9:33am
SleakerI can understand Notch's statements he made to Kotaku about growing bigger than he intended, and getting hate for EULA changes he didn't enact.09/15/2014 - 9:32am
MaskedPixelantehttp://pastebin.com/n1qTeikM Notch's statement about the MS acquisition. He wanted out for a long time and this was the easiest way.09/15/2014 - 9:08am
ConsterEh, I can't blame him.09/15/2014 - 9:01am
 

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