#Microsoft

I’ve become a symbol. I don’t want to be a symbol, responsible for something huge that I don’t understand, that I don’t want to work on, that keeps coming back to me. I’m not an entrepreneur. I’m not a CEO. I’m a nerdy computer programmer who likes to have opinions on Twitter.
Markus “Notch” Persson, the creator of Minecraft, explaining why he sold his company and why he won’t be involved going forward — which, perhaps, shouldn’t be surprising at all.

As expected, Microsoft has announced the massive $2.5B acquisition. And good for them for saying they’ll continue to support all the platforms the game currently supports, including PlayStation, Android, and iOS (though, notably, Mojang itself seems to do quite a bit more hedging in their statement — saying, basically, everything is always subject to change). 

What I don’t understand is why people think this deal doesn’t make sense. It makes a ton of sense. Microsoft already has a history of doing this type of deal with Bungie amongst others. That deal made the Xbox. I don’t think it’s a stretch to say that without Halo, the Xbox would have failed. 

But more importantly, I fully agree with John Lily’s take the other day: this is about access to the next generation of makers (developers, tinkerers, etc). More than once, I’ve been in a random place in a random part of the world and seen a kid glued to their phone playing Minecraft. 

That phone, of course, was not a Windows Phone. And it’s probably too much to hope that now it will be — that battle has long been fought and lost, even if Microsoft won’t admit it yet. But if Microsoft is thinking about this the right way, this should be about more than phones.

I’m just shocked they beat Lego, now the largest toy maker in the world, to this deal.

Ashley Burns:

Hell, the Microsoft Xbox even showed up as the sponsor of last Thursday’s NFL Kickoff Concert in Seattle, as Pharrell and Chris Cornell put on shows for the fans, who were undoubtedly hypnotized by the endless barrage of product placements. So you’d think that with all of that money spent on getting the Surface in front of our faces that the NFL would have sent out at least one memo to the networks to make sure that this specific sponsor was mentioned by name. If anything, someone might have written “Please don’t call it an iPad!” and emailed it to the announce teams.

If that did happen, Fox’s John Lynch didn’t get the memo, because he went ahead and called the Surface tablets “iPad-like tools” during yesterday’s Saints-Falcons game. Whoops.

$400 million well spent by Microsoft. It just goes to show you: you can buy placement, but you can’t buy mindshare.

We have tried using the Windows Phone OS. But it has been difficult to persuade consumers to buy a Windows phone. It wasn’t profitable for us. We were losing money for two years on those phones. So for now we’ve decided to put any releases of new Windows phones on hold.
Richard Yu, head of Huawei’s consumer business group, in an interview with WSJ. Worth noting that his comments on Windows Phone are still slightly better than those about Tizen, which has says has “no chance to be successful.”

Benny Evangelista:

Each team will have 13 Surfaces on the sidelines and 12 in the coaches box. The league owns and operates the tablets, which run on a secure wireless network. The devices will be locked in a temperature-controlled cart between games to prevent any team from manipulating the information.

I can’t believe Microsoft would let the NFL release the total Surface sales data for the quarter already.

And:

The league’s competition committee placed restrictions on the Surface tablets: They can display only still images, not video, and they won’t have Internet access.

There’s an Internet Explorer joke in here somewhere as well.

I think it’s both crazy and good that Microsoft is sharing such a statistic. They’re finally admitting the major weakness, but focusing on how it can be a strength.
"Yes we’re a big company, making a ton of money, but look at how much we can grow in this key area!" And yes, a new mindset is required to execute this: that of the underdog.

I think it’s both crazy and good that Microsoft is sharing such a statistic. They’re finally admitting the major weakness, but focusing on how it can be a strength.

"Yes we’re a big company, making a ton of money, but look at how much we can grow in this key area!" And yes, a new mindset is required to execute this: that of the underdog.

Insert the joke here: Times change — The times they are a-changin’ — Think different.
But really, this IBM deal seems like a smart partnership for Apple. They could either double their workforce to fully go after enterprise, or they can partner with a massive company already doing that. 
Yes, Apple likes to control every aspect of what they do. But enterprise is not a core competency and won’t be any time soon. Yet customers are demanding it. Hence, this deal.
And yes, this is potentially very bad news for Microsoft — which, oddly, is now the one trying to do everything itself. 

Insert the joke hereTimes changeThe times they are a-changin’Think different.

But really, this IBM deal seems like a smart partnership for Apple. They could either double their workforce to fully go after enterprise, or they can partner with a massive company already doing that. 

Yes, Apple likes to control every aspect of what they do. But enterprise is not a core competency and won’t be any time soon. Yet customers are demanding it. Hence, this deal.

And yes, this is potentially very bad news for Microsoft — which, oddly, is now the one trying to do everything itself

Ben Thompson:

Over the last two generations of consoles, however, prices have actually risen, and today a Playstation 4 or Xbox One is nearly the same price as an average PC.

In some respects, this makes no sense: why hasn’t Moore’s law had the same impact on consoles as it has had on PCs? Moreover, when you consider that consoles now compete with a whole host of new time-wasters like phones, tablets, social networks, dramatically expanded TV offerings, the Internet, etc., it’s downright bizarre.

And:

Let me be very clear: this is a perfectly rational response by Microsoft, and a strategic disaster, all at the same time. The reason the Xbox existed in the first place was to give Microsoft a toe-hold in the living room. Over time the expectation was that the entertainment aspects of the console would make it appeal to not just gamers, but normal consumers as well. Instead, Microsoft has (understandably) been captured by gamers, and the only purpose their original strategic intent has served has been to make them less competitive with said gamers (the Xbox was more expensive and made different processing choices in order to accommodate the Kinect-centric entertainment focus). Meanwhile, no rational non-gamer will buy an Xbox One for $499 $399 in the face of sub-$100 alternatives like the Apple TV, Kindle Fire TV, or Roku.

Lots of great stuff here by Thompson. Much of this is exactly why I felt like this generation of consoles could be very troublesome for these companies. And yes, why I think Apple has a very real opening here (I may have just been off by a year).

Microsoft isn’t just doing the wrong thing, they’re doing the opposite of what they should be doing if they really want to own the living room.

Arash Markazi:

Even worse than being named after a sailing ship that has been out of commission since the 19th century is the Clippers’ logo. It’s a knockoff of the Lakers’ logo, which was introduced when Sterling took over the team in 1982 with an eye toward relocating the team to Los Angeles.

It’s the sports version of opening up McDowell’s across the street from McDonald’s.

It basically looks like Sterling showed the Lakers logo, which had been around since 1960, to someone and asked for it to be copied as best as it possibly could without getting him sued for copyright infringement.

Agreed on both the name change, and the ridiculous logo. But what should Steve Ballmer rename them to?

Don’t make a ‘Clippy’ joke. Don’t make a ‘Clippy’ joke. Don’t make a ‘Clippy’ joke. Don’t make a ‘Clippy’ joke. Don’t make a ‘Clippy’ joke. Don’t make a ‘Clippy’ joke. Don’t make a ‘Clippy’ joke. Don’t make a ‘Clippy’ joke. Don’t make a ‘Clippy’ joke. Don’t make a ‘Clippy’ joke.

A few crazy things about the sale (aside from the fact that it’s happening):

1. It’s $2 billion when the most valuable franchise in the NBA, the Knicks, were valued at $1.4 billion just a few months ago.

2. The Dodgers were sold in 2012 for $2.15 billion — the most expensive sports franchise deal ever — but that included all the land in Los Angeles on which the stadium (and parking lot) sits. More importantly, it included the massive television deals for the team.

3. The Milwaukee Bucks were just sold for $550 million earlier this year.

4. Donald Sterling bought the Clippers for $12.5 million in 1981.

5. Ballmer will own 100% of the team and become the most wealthy owner in sports, with his net worth of just over $20 billion. 

6. The person who he passes on that list? Microsoft co-founder Paul Allen (who owns both the Seattle Seahawks and the Portland Trail Blazers).

7. Ballmer outbid a group including Oracle CEO Larry Ellison, Laurene Jobs (the widow of Steve Jobs), and newest Apple employee Jimmy Iovine. 

Ben Thompson makes the case as to why new Microsoft CEO Satya Nadella should kill off the Surface product line:

This here is the greatest danger of forgetting your original goal; you start making up new ones, that are basically “because we need it to exist.” The hardware capability that Nadella claims Surface leverages only exists because of the decision to make Surface. Nadella is basically saying Microsoft needs to make Surface because Microsoft makes Surface. With that sort of reasoning, you can continue on a wrong path forever, just like the Xbox.

I was thinking this very thing last night after hearing Nadella speak at the Code Conference. He often seems to be making the case for many of Microsoft’s products because they already exist, not because they should exist. As he did with the Surface Mini, I expect him to trim.

Shira Ovide:

Microsoft had a tough first foray into homegrown computing devices with the introduction of the Surface in October 2012. Microsoft has recorded about $2.64 billion in Surface sales so far. Apple, by comparison, sold $7.6 billion in iPads in the past quarter alone. Nomura Securities estimated that Microsoft has accumulated roughly $2 billion in operating losses on the Surface.

While the two devices may be in the same category, they are not in the same league.