Goldman Sachs: Xbox Division Should be Spun Off

A Goldman Sachs analyst (whose company was saved by taxpayers, for the record – you’re welcome) says that Microsoft should spin off its Xbox division and downgraded Microsoft share recommendations from buy to neutral. In a new report, Goldman Sachs said that "A break-up of the consumer businesses could potentially unlock hidden value, or more discipline on cost could turn the businesses into contributors to profitability and shareholder value."

Goldman Sachs: Microsoft should split off ‘unprofitable’ Xbox dept. Analyst Goldman Sachs has downgraded Microsoft share recommendations from ‘buy’ to ‘neutral’, and suggested that one way to resolve the firm’s apparent difficulties is to split off its consumer entertainment division.

Goldman’s Sarah Friar added that "The Xbox products could be an appealing stand-alone entity, given the historical success of the Xbox and the products’ brand strength, and the business could show unlocked value with forced cost discipline compared to as a piece of Microsoft."

Other analysts strongly disagree with the assessment: "Pulling this off would be like Microsoft learning Geller-ian magic tricks, the equivalent of being able to bend spoons with its brain," said investor Paul Kedrosky.

Finally, analyst Matt Rosoff told ComputerWorld: "I think it’s silly to spin off a profitable business. Xbox would lose more than it would gain by going it alone." Rosoff felt that the company would be better off carving its search business, due to the complexities of competing with Google.


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  1. 0
    Thad says:

    Dude, James…sorry to be a downer, but you really need to proofread your posts.  You’ve got a typo in almost every sentence ("you’re welcomed", "In a new report from Goldman Sachs said that", that entire weird second paragraph that restates what’s said in the first paragraph in a run-on sentence, "Other analyst strongly disagree with the assessment").

    It’s a good story, but it looks like you were really in a hurry when you put it up.  Take a minute to check your work before you hit that Post button.

  2. 0
    Neeneko says:

    Yeah… I don’t see it.

    Spinning off would be a great way to make some bankers some money, but I can not picture how it would do anything positive for Microsoft.

  3. 0
    Mr. Stodern says:

    Yes, I’m sure one of the most successful companies in history is going to take the advice of one that had to be BAILED OUT BY TAXPAYERS!

    Sorry, but that’s just a LOT of fucking nerve right there. Jack Thompson-sized nerve, you know?

  4. 0
    Thomas McKenna says:

    Yes, let’s listen to the people known for falsely raising the value of their own stock.  Sure, Microsoft could probably burn their reputation into the ground and make a few bucks.  But who will bail them out when they eventually realize their stock is worth nothing and collapse?  They can’t go crying to the government like Goldman did.

    Bill Gates has done something Goldman has failed to do.  He has become richer than god, all the while establishing a brand that actually is worth something.  Goldman should keep their suggestions on "smart" business practices to themselves and leave business to the people who are actually good at it.

  5. 0
    Master Taffer says:

    I’m inclined to agree with Matt Rosoff here.  Microsoft letting go of the strong brand name and Xbox losing Microsoft’s support would hurt both sides of the divorce if it went through.

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