Should The 360 Form Its Own Corporation?

Goldman Sachs' analysts punked Microsoft's stock rating and archly suggested that the company spin off the Xbox 360 division, saying such a sale could unlock hidden value within the unit and free it from the company's more sluggish performance.

The report, released over the weekend, downgraded Microsoft from "buy" to "neutral" (which, if a stock was a triple-A title, is like going from an 8.0 to a 7.5 on a game rating scale. Yeah. It's that bad.) In bemoaning the company's Windows-based revenue, Goldman Sachs said that corporate overhead was harming the Entertainment and Devices Division, home of the Xbox 360.

"The Xbox products could be an appealing stand-alone entity, given the historical success of the Xbox and the products' brand strength," the firm wrote, suggesting that Microsoft become two entities, one focused on consumer products and another on enterprise business, akin to Apple in the former and Oracle in the latter.

Fun telling other people what to do with their money, isn't it?

Goldman Downgrades Microsoft, Makes Case For Major Overhaul [TechFlash]


    An I the only one seeing the irony about Goldman Sachs providing financial advise at all?


      Xbox was only possible with the massive cash pile of Microsoft. MS would be crazy to spin it off now that the venture is highly profitable, at least without soaking up returns on their massive investment.

      Even though their enterprise division is massively profitable, a smart business would know that there is nothing that can be counted on ten years down the track.

    Given its basically never turned a profit I am not sure how well a standalone Xbox division would fare. They only took the fight to Sony and Nintendo because they had bags of Windows money to burn.

    I wonder what their advice would be after Kinect launches.

    MS is obviously going to tie in all their different divisions: Xbox, Zune, Office etc into their upcoming Windows Phone 7 platform.

    Also, MS will never let the name go. Xbox is where they are because MS trucks piled with $100 bills dumped millions everytime they needed a cash injection to stay competitive with Sony/Nintendo. It's quite obvious that only a company as wealthy as MS could have possibly entered the already dog-eat-dog world of videogame consoles.

Join the discussion!

Trending Stories Right Now