Cramer: Microsoft spinning Xbox

CNBC's David Faber and Jim Cramer discuss Microsoft's potential buy of Sweden's "Mojang," the maker of the "Minecraft" video game. Cramer says Xbox is not core to Microsoft and this is the beginning of a spin off.

[qwerty676]

wow bold prediction. hes pretty much saying that this is a done deal and xbox will soon be a goner.

that would not be good...

[pedrof93]

I belive that the minecraft deal is to put minecraft in every windows PC. Like minesweeper and pinball but this time with minecraft. Either that and their going totally software. What's the point of Xbox (and tablets) in software only company anyway ? But Xbox spin off would be bad, because Sony without direct competition would simply slow down and it would be bad for us gamers.

[Mr Pumblechook]

The commentator thinks the acquisition of Mojang by Microsoft signals their desire to make the Xbox division attractive to any potential buyers - I disagree.

I think most commentators on N4G, myself included, can tell you that is a strange deduction. When you are looking to sell you don't SPEND $2 Billion! Minecraft, appealing as it is, is not the one IP that would make a company want to buy Xbox, MS already have Halo.

Microsoft's purchase of Gears of War and Halo from Bungie demonstrates they buy valuable IP to help promote their platforms and Minecraft is very attractive.

[-Foxtrot]

Sony will have Nintendo though to compete against, it wouldn't really be about sales then but would be about games and exclusives.

I'm guessing if the focus was on that in direct competition with Nintendo like back with the PS1 and N64 Sony would want to keep trying to find it's Mario and Zelda. They did this with Crash Bandicoot, hell look at the ads back then with Crash standing outside Nintendos office..."Your worst nightmare has arrived".

I don't think it would be that bad to be honest, gamers might stop making it about sales and start making it about games again. I'd rather hear "My console is better then yours because of X, Y, Z games" then "My console is better then yours because it's got 10 million sales". I'd like to think Sony aswell would get serious with JRPGs with Nintendo housing some on their console.

[Charybdis]

xbox brand will not go away looking at the video it seems that he is interested in owning a part of the xbox and brand if spin off hapens.

[fr0sty]

Minecraft has nowhere near the popularity to justify a 2 billion dollar purchase.

[SilentNegotiator]

They don't even include MineSWEEPER anymore.

[k3rn3ll]

I'm afraid you all have the wrong idea as to what spinning off is. It would basically make xbox it's own corporation. Not selling anything. They would then have their own ipo which would create more money for future acquisitions. Sorry to disappoint everyone that wants xbox to disappear because a spin off would not be the case.

[ABizzel1]

Well, well, well looky here. I think this is all a bit of a stretch, and I don't see how buying Mojang could represent MS spinning off Xbox. However, I truly do hope this is the beginning of my 3 platform future.

Sony sticking to the console business
Xbox going back to their PC roots with a PConsole hybrid
Nintendo making a Handheld-console hybrid

All 3 platforms would still be great gaming devices, but each would be unique and and dominate their niche, and hopefully sales will be great for all 3.

Sony would have the traditional console, sticking with the PS consoles.

The Xbox system would be similar to Steam Machine, or basically a PC in an Xbox case. They would be able to use straight off the shelf products allowing them to make a powerful, but affordable PConsole, and best of all it would benefit PC gaming since it can become the target hardware for PC game standards allowing rigs to scale up or down from the Xbox.

Nintendo is best suited for a Handheld-hybrid console their handhelds greatly outsell their consoles and Japan is a handheld / mobile market, and a hybrid device would allow them to not only get the usual 80m - +100m handheld sales, and at the like Sony is doing with the PS4 they can focus their entire 1st party on one platform and not have to split their efforts on two different devices.

Still competition, but each having their own lane to dominate, and offering something completely different from one another.

[mikeslemonade]

SMH the users here on N4G don't know what's good for them.

Tomb Raider a timed exclusive, a good thing.

Mojang bought out, a good thing.

Final Fantasy multiplat, bad.

Resident Evil multiplat, bad.

MGS multiplat, bad.

You need differentiation and more reasons to buy a system.

[redwin]

If we loose MS in Xbox, Sony will bring us back to Walkmans .. Oh lord !

[choujij]

Either way, I think something's eventually going down. If it is spun off, I question whether it's ip portfolio, investors or the potential acquisition of Mojang and it's ip will be able to keep Xbox afloat. Especially in it's current state. Without MS' deep pockets, it may end up with the same fate as Atari or Sega.

[Kayant]

"xbox will soon be a goner" - Console wise maybe but not brand wise.

[DonDon]

I like that there are multiple competitors to keep Sony on it's toes. However, I don't think Microsoft is good enough. MS has introduced more harmful things to gaming in just a generation than any other company has since the beginning of gaming. All MS does is throw money aro7nd to turn otherwise multiplatform games into exclusives--which doesn't add anything positive to gaming industry because xbox was getting that 3rd party game by default anyway (since it's 3rd party). Why not just create their own new IP's like Sony does? Plus parity clause, misleading commercials about 3rd party games, introducing the pay for online scheme in the first place, lack of Japanese support, and overall disinterest on what actual gamers want, etc. To hell with Microsoft. Let them fade away and sell the Xbox Brand to a company who can turn it around.

[S2Killinit]

Totally agree with you. I dont want Xbox to be gone but i do want MS to step aside from gaming, they are not in it for games/gamers. Another company taking over cbox would be good, as long as xbox itself sticks around.

[k3rn3ll]

Yea cuz when studios and ip are up for sale all the big players should just back away and not buy shit. Stop acting like when a company is up for sell its only because MS offered them. You don't know business son. That's how shit works in the Movies. IRL businesses are bought because they are up for sale. Not just because they're are conglomerates throwing at them and they switch their position to selling

[bleedsoe9mm]

thats not what he said at all , he said xbox spins off , and with the influx of cash from having its own stock holders (and as leverage) they get even bigger acquiring more studios , mojang being the corner stone .

[k3rn3ll]

I'm amazed. I thought I was the only one who knows what a spin off is. Everyone else thinks it means sell off. But you are correct. No one will notice they will go back into saying the purchase on mine craft is the end of days lol

[BitbyDeath]

I still think it'll be Amazon who buys them if anyone.
Amazon have been doing a few things behind the scenes which points to them getting into the gaming industry.

[Charybdis]

would be interesting to see what would happen with the equivalant shares given to the microsoft shareholders. a major bid of amazone on majority shares on the spinn of would increase the value of the shares and capital for the xb brand

[MrPerfect813]

I agree, the amazon fire phone has been a flop so far. But I could see amazon integrating their services into Xbox even more than they are already.

[Charybdis]

not really spin offs are quite common and would make sense for microsoft investors. It would most likely increase investor returns as this is the case and reason for most spinn offs. As a seperate entity the xbox brand should be able to focus more on it entertainment services and branding.

Biggest takeaway is that a corporate spinn of isnt really a divestment or a sale in this case it would allow the xbox brand to distance itself from the corporate brand image and history while still beeing backed by Microsoft.

[OC_MurphysLaw]

+bub for getting how this could work

[jnemesh]

You are right! It would not be good, it would be GREAT! The sooner Microsoft exits the market, the better off gamers will be!

[llxKonanxll]

How would Xbox spinning off into it's own "thing" be any different than Nintendo?? It would definitely not have the financial backing that would benefit it's weak sales. But it wouldn't necessarily mean it would be a "goner".

[Evilsnuggle]

Let explain just because microsoft wants to spin off xbox brand. Doesn't mean that x1 or xbox brand is doomed . Not at all go check my comment I have said here on n4g multiple times . That microsoft want to spin off xbox brand . why because microsoft doesn't know really know how much money xbox brand is costing the parent company. If microsoft spins xbox brand off then they can see if it's losing money or making money .

The only real problem that x1 will face is if xbox brand is spin off .x1 would be on a budget . No more endless advertisements or less spending on 3rd party exclusive . This comes at a bad times being so badly out sold by PS4 . x1 could use that money to help even the playing with PS4.

Personally think that this will be the last xbox brand hardware. I think that microsoft will turn xbox in to a cloud games streaming service like a gaming netflix.

Analyst Rick Sherlund believes that staggering losses on the Xbox business are being masked by Android royalties.

It's hard to make money making game consoles but the assumption, as I understand it, is that if a company can power through the lean early years, it'll eventually figure out how to start turning a profit on the things - not a lot of profit, perhaps, but at least a little bit.

According to Nomura analyst Rick Sherlund, however, Microsoft isn't quite over that hump just yet. It is, in fact, bleeding money at an alarming rate, but nobody's noticed because the losses are masked by Android licensing revenues.

"If we start with the overall traditional [Entertainment and Devices Division] business that actually loses money before corporate allocations and back out the nearly $2 billion 95 percent gross margin Android phone royalties, we conclude that Xbox platform plus Windows phone and Skype lose about $2.5 billion per year, and we estimate that the Xbox platform may account for roughly $2 billion of this," Sherlund said.

http://www.escapistmagazine...

[VealParmHero]

If this was true, and they do "spin off" xbox, that doesn't mean it needs to be closed down. It just means xbox becomes independent of MS and becomes its own company with its own executives etc. I mean who knows what would happen then, but I just want to point out that a spin off does not mean selling off each part and breaking the brand up. So this would not mean the end of xbox, at least not directly.

[Christopher]

How do you translate to mean Xbox will be a goner? They're talking about Xbox being spinned off into its own company with its own stockholders and whatnot. Essentially MS thinks this is viable enough of a product, they want to make it its own entertainment focus under just the Xbox brand and with its own officers, stockholders, and whatnot.

[TruthInsider]

Please be true, please be true!

Microsoft need to dissapear, gaming has gone downhill ever since they came into the console business and took everyone for foolish, backward cash cows!

Good riddance!

[aviator189]

I doubt they're going to spin it off.
The best reason ms is buying mojang is to further push minecraft's influence everywhere and to gain that additional revenue stream that minecraft produces, something that would be wise to have for the xbox division.

[MRMagoo123]

further push minecraft..........seriously ??? minecraft pushed further to the market, the market where even a cat would knows what minecraft is. I dont think minecraft needs any help at all with marketing.

[Sayai jin]

@MRM- Minecraft is very popular, but marketing would go into licensing, money, etc. More money for things like movies, kits, clothing, spin-offs, making it part of the OS games, etc. I think people are assuming MS is making this deal for just Minecraft, but I believe its a lot more than that. They will be able to provide more money to push the brand. Mojang could be working on a new project. MS would get a cut of the profit. The MS Top Exec said they were going to bring the Xbox brand/MS to the mobile arena....minecraft wwill help grease the reels.

[djtek184]

Somebody send me the embedded video link so I can fix it

[uptownsoul]

this what you looking for? http://video.cnbc.com/galle...

Sorry, the description says Cramer and Microsoft but the videos are all random

[djtek184]

It's fixed, thanks though.

[CerealKiller]

This guy doesn't know anything I used to watch his show he just recommended every stock that was at its all time highs. When Take-Two was at ~$12 a share he told everyone to stay away, now it is at $23+ and he is telling everyone to buy.

[Fireseed]

Yeah but now that hes predicting the downfall of the Xbox brand, watch this man get raised upon the shoulders of people on N4G and be praised as a god.

[Benjammin25]

That made me laugh. :)

[gametangents]

Just remember Cramer is an entertainer. His track record in investing and his predictions are not good. He makes millions from his show.

[Thefreeman012]

i remembered when Jon stewart made him cry... THAT was entertaining

[mrpsychoticstalker]

The Xbox brand is getting even bigger . Good job Satya Nadella.

[Magicite]

a bigger flop indeed.

[Thefreeman012]

How is this news? Cramer is an idiot...

[uth11]

Cramer has made some spectacularly bad predictions, His accuracy is no better than flipping a coin.

I do think a spin-off of the Xbox division is possible though, especially if it doesn't start performing better

[gamerfan0909]

The console is performing just in line with what the PS3 and Xbox 360 was doing last gen. I don't get these doom and gloom theories about it failing. It's essentially doing a million and a half units less than the Wiiu despite being a year behind it. The console will probably hit 7.5 to 8 million users by the end of the year and potentially 16 to 20 by next year or Q1 of 2016.

[BitbyDeath]

No, Xbox has shipped around 5.5 million, maybe even 6 million by now.

3.9 million was shipped last year.

6 - 3.9 = 2.1 million shipped.
Actual sales would be closer to the 1-1.3 million mark for this year.

Both 360 and PS3 did way way way better than that.

[MarkusMcNugen]

@BitbyDeath

The holiday season hasn't even arrived yet. All the consoles will see a surge in sales, I highly doubt 1.3 million will be the end year results if they have already shipped 2.1 million.

[uth11]

The thing is Xbox is a tiny part of Microsoft, and I believe it loses them money overall or breaks even. I can see them spinning it off.

It's not necessarily doom and gloom. The new owners could be better stewards of the Xbox brand and it could thrive better.

[gamerfan0909]

He does have a point to a certain extent. Spin off Xbox, make it it's own company, and essentially use the stockholders money to invest in bigger studios and run by itself. I doubt MS does this, though. Xbox is probably their most recognizable brand they've created since Windows. The acquisition of Minecraft is gigantic. If they can secure those games on PC and Xbox One only and then market the merchandise and the IP to studios, clothing, movies, ect then they could be sitting on a goldmine. Best acquisition since skype.

[tuglu_pati]

It kind of make sense to me. Spin off Xbox and concentrate on software. Either way this uncertainity does not help the Xbox brand with the costumer in any way.

[DougLord]

Every one in the investment community knows Cramer is an idiot! The reason he is on TV is that he destroyed his hedge fund. He lost 87% in 2001 and none of his top 10 positions is still a company. The reason they are doing this is because they are putting to use some of the TENS of billions in offshore cash they have that they cant use to pay dividends or buy back stock. Its a TAX GAME.

It is FAR more likely that Sony spinds off PlayStation to get it out from underneath $70billion of debt, and then Amazon, Google or AAPL buys the PlayStation business.

[BitbyDeath]

Playstation division is in the black, no debt.

http://www.neoseeker.com/ne...

[hello12]

Bitbydeath you forget to read the last few lines@ Sony also abandons hope for profitability as it now predicts a net loss of 110 billion yen ($1.1 billion) for the fiscal year ending March, its fifth loss within six years.

Playstation is doing good, but the company isn't. Investors still view Sony as a weak company undergoing change.

Jukin@m what date. Hes link is a news piece from Feb 2014. A profit means nothing if you're predicting a bigger loss for the year for the company. He loss was predicted at 1.1 billion up till March. Sony has lots of debts. You guys believe playstation is a miracle all the bad debts have just washed away over night. Thats not true.

[jukins]

@knws you forgot to read the date. While they posted a, loss for that fiscal year. For the first quarter thus year they posted a profit.

[Godmars290]

So MS is going to "sell" off the Xbox brand, yet in the same motion pick up general IPs such as Minecraft?

Does that make any sense?

Nevermind that is coming from a one second clip on a site that wont load worth anything.

[DLConspiracy]

You don't spend 2 billion on a franchise to turn it around and sell soon after... That doesn't make ANY sense. Unless you are getting it at bargain bin prices. Minecraft is not a bargain bin item.

[psuedo]

Why would anyone want to buy minecraft though? Everyone that wants to play it already has tried it. It's old news. It's nothing new. I don't see it as a good investment other than to turn a few people away from the ps4. Plus you could just play a better version with free mods, free texture packs, and a MUCH larger world on PC. I just don't get it.

[BitbyDeath]

Which is where these wild predictions are coming from cause it is the only thing that would make sense in doing so, to make the buy more attractive.

[MarkusMcNugen]

There are tons of royalties from the Minecraft license, not to mention future sales on the Xbox One platform. Also, just because a lot of people have played it doesn't mean more people wont buy it. Ive never bought or played Minecraft, but I can guarantee you that once my son turns 5-6 I will buy it for him to play. There is a thing called future generations and future sales.

[OC_MurphysLaw]

IF Xbox is spun off... it could be spun off as its own company not necessarily bought by someone. Xbox would be a subsidary company of MS but it would in fact be their own company and not a division of MS like they are now. MS most likely would retain majority stock rights in some fashion but it would free up Xbox even more to act in the best interest of the company.

It could also be sold off to someone but that price is gonna be huge and I am not sure anyone out there is willing to pony up that cash.

Just my two cents.

Also for those wondering why Minecraft...it will be a revenue source and a big IP for the mass market and emerging markets like China. They will continue to evolve it AND... who's to say Mojang is just working on Minecraft? Whatever their next IP is .....you can bet it will get lots of interest.

[Ko_Uraki]

I don't see any logic in it

[n4rc]

dude just likes to yell on TV.. This is an insanely stupid prediction, especially from a so-called professional..

If they wanted to get rid of Xbox (which they don't, get over it) how does buying a game studio make any sense?

They aren't hurting for money.. If they sell to ms, it'll be top dollar.. And you won't see any extra return on that investment so no.. It makes no sense

[BlackWolf12]

Microsoft doesn't need to make the Xbox.

Them buying Mojang is not connected at all to the Xbox platform, let's make that clear. Minecraft was first and foremost a PC game, with only recent ports to consoles. Buying Minecraft means they can control it and release it exclusively on Windows.

Microsoft has ALWAYS been about the Cloud. Their entire business has focused on it for years, their end goal is to have an entire operating system running on the cloud. I thought they would have made the move for a streaming service like PS Now faster than Sony did to be honest, but they are behind. The reports of them testing Xbox games in your browser further proves this is their goal.

They could spin the console off to Amazon, they would buy it for sure.

[phantomxll]

Damn. Now the financial gurus are investing in click bait...

[xx4xx]

Is been about the months since we lay heard these rumors....here we go again.

[MCTJim]

Up next. Microsoft makes deal with Nintendo to bring their games to MS consoles..story at 11

[sypher]

He wasn't talking about selling Xbox but spinning it off as its own publicly traded company instead of as part of Microsoft.

[scoobs]

Spinning off Xbox does not mean Xbox seizes to exist... just that it's no longer under the Microsoft name. It would still be a company, it would still exist. Settle down, this probably won't even happen.

[chuckyj1]

Doesn't make since to me that they would spend $2B on a company then spin it off....

[Sheikh Yerbouti]

This would be gooooood news for the industry if it happens. This will make XBox the master of its own destiny. Microsoft would have a big chunk of the XBox Stock of course and thus influence. But this would mean we will have Xboxes for generations to come, Lord willing.

I fail to see how buying Mojang makes it more feasible when they have one blockbuster title that is developed externally for consoles, not by Mojang itself. That $2 billion seems excessive...!