microsoft-entertainment-and-devices-division
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Microsoft shutters Pioneer Studios
Microsoft announced today that it has closed Pioneer Studios, a small contingent studio in downtown Seattle it has operated for the past three years, stating it's part of "a broad consolidation of workspaces over the last 18 months." The company also confirmed "most employees" have been moved to other locations "to continue their work as a team" so it would appear at least some dodged the axe. Formed by J. Allard during his days overseeing Microsoft's Entertainment and Devices Division, Pioneer Studios was designed by local architectural firm, SkB Architects, to be a place where employees could "breathe a culture of innovation into the all-too-often stolid company." Basically, they came up with consumer gadgets like the aborted Courier. Pioneer was one of many idea incubation groups at Microsoft, including FUSE Labs, The Garage, Startup Business Group and The Hardware Incubation Lab. [Image: CNET]
Kinect sales help drive strong holiday quarter for Microsoft, Xbox division revenue soars
For the second-straight quarter, the spotlight was on the Entertainment & Devices Division, under which the Xbox business drove slightly record-setting revenue for Microsoft in the holiday quarter (in the books as Q2 of fiscal year 2011). Profits for the quarter ending December 31, 2010, were actually slightly down compared to the same period in 2009, but spirits must be up -- we're talking about $6.63 billion in profit pocketed by Microsoft last quarter. Entertainment & Devices itself increased its revenue a staggering 55 percent in comparative year-over-year fiscal Q2 growth, pulling in $3.6 billion of the mega corporation's $19.95 billion total revenue for the quarter. "We are enthusiastic about the consumer response to our holiday lineup of products, including the launch of Kinect," said Microsoft CFO Peter Klein. "The 8 million units of Kinect sensors sold in just 60 days far exceeded our expectations." The company added that Kinect's popularity had a trickle-down effect, boosting sales of Xbox 360 consoles and games, as well as Xbox Live subscriptions. Any impact on revenue from the launch of Windows Phone 7, however, went unmentioned.
Microsoft's Robbie Bach and J Allard leaving as part of broader shakeup; Xbox and Windows Phone teams now reporting directly to Ballmer
Well, it looks like the rumors were true. Not only is Microsoft's J Allard now officially leaving the company, but so is Robbie Bach, President of Microsoft's Entertainment & Devices Division, amid what's described as a broader restructuring that will effectively dissolve the division and give CEO Steve Ballmer more direct oversight of Microsoft's consumer initiatives like Xbox and Windows Phone as of July. Contrary to earlier reports, Allard says that he's not leaving due to the cancellation of the Courier, but instead says that after nineteen years with the company, he simply wants to devote more time to his personal interests, "particularly adventure sports." Allard also insists that he won't be moving on to Apple, Google or any other Microsoft rivals -- in fact, he's staying on as an advisor to Steve Ballmer. Robbie Bach's departure is equally curious -- despite being just 48, his move is being described as a "retirement," and he says that the decision was his own and that he wasn't encouraged to leave. He'll also apparently remain with Microsoft through the fall to aid in the transition. When all's said and done, mobile communications VP Andy Lees and interactive entertainment head Don Mattrick will each separately report to Ballmer -- both have headed their divisions for some time now, so we'd assume that things will otherwise proceed as planned. Still, the loss of talent at the top is certainly noticeable -- we'll see how Microsoft responds now that Ballmer is firmly driving its mobile and gaming efforts. We've got Ballmer's full letter to the company and Microsoft's official PR after the break, so take a peek. Update: Mary Jo Foley has J Allard's parting email to his employees.
Xbox division profits for second straight year, but ...
Microsoft's Entertainment and Devices Division -- the gaming and Zune portion of the company -- has announced profits for the fiscal year that ended on June 30. Unfortunately for Microsoft, it's 66 percent less profit than last year ($169 million, down from $497 million). In this economy, though, some profit can still seem like a total win.Revenue from Xbox 360 and PC sales dropped in the fourth quarter by 12 percent, to $110 million, due mostly to reduced Xbox 360 hardware sales and, of course, the fact that the systems cost less and brought in less revenue per console than in 2008. Shipments declined in this period from 1.3 million in 2008 to 1.2 million units. Overall, however, shipments increased from 8.7 million to 11.2 million units. Go figure.
