Published on July 19th, 2014 | by gareth0
Do The Layoffs at Microsoft Signal Trouble For The Xbox One and A Win For Sony
When Microsoft announced its plans to layoff nearly 18,000 workers in the next six months as part of a reorganization of the company, this sent ripples through the world of technology that saw the company as a model of stability.
While layoffs for any company are common, this is perhaps the most public admission that the way the company has operated in the past will not be sufficient going forward and that the company is having to admit that certain divisions simply are not working and showing the needed profit in order to be maintained. Under the leadership of Satya Nadella, Microsoft has looked hard at things such as their mobile phone and tablet plans, Xbox Entertainment, and other divisions, and looked at the future. The company known for its Windows, Office, and Xbox Lines, also looks towards Cloud technology and their battle with Google to become the leader in the web browser war.
This brings me to the Xbox One. It is not a secret that the company has invested heavily in the systems and that many insiders believe that the system may never fully earn their investments back.
I remember Microsoft as a company that rarely admitted mistakes, Zune or BOB anyone? And would take losses, pay fines, and announce products that did not exist simply to keep the competition at Bay. This was a company that rarely admitted a failure or mistake and would often cite consumers for not getting something as the reason behind the demise of a product.
This is not the Bill Gates era Microsoft and under their new leadership, the excise is being trimmed and divisions are being evaluated strictly on their profit/loss numbers rather than nostalgia and tradition.
Microsoft has made many changes in the Xbox One from announcement to the current model, the most recent being the packaging of a Kinect free unit that allowed them to match their price point of their Rival Playstation 4.
While sales have increased for the system, they still lag behind Sony as the Playstation 4 was recently confirmed as the top selling console for the 6th straight month. So while the Xbox One is doing better, it is still not good enough to overtake the momentum Sony has built up.
Looking down the road, it is likely that the Xbox One will sell well over the coming Holiday season with titles such as Sunset Overdrive and The Master Chief Collection, however if sales continue to lag behind Sony, at what point would Microsoft consider even more changes?
I think it is very unlikely that they would abandon the console as they have invested so much into it and it would be a huge face palm to see the system fail. As such the company has done what it usually does; throw tons of money at it hoping it will solve the issues.
Gamers however have been leery due to the early and frequent missteps of the system and as such Sony has taken advantage to jump to a nearly 2-1 unit sales lead worldwide. Should this margin increase, one has to wonder how much patience the new powers that be will have until resources are allocated elsewhere.
Regardless of what the future will hold, this is an exciting time in the industry and let’s hopes that those being displaced will find new and rewarding career options soon.