Is Microsoft getting out of the Xbox Music and Video business? Nadella suggests they might (Updated)
Readers of this site know that Microsoft's Xbox Music and Video are good services at their core, but many speed bumps keep them from reaching their potential. Whether it is stiff competition from Amazon and Apple or an awkward software experience, the Microsoft teams behind both services have their work cutout for them. Toss in the rebuilding attempts at the Xbox Music app for Windows Phone 8.1, and many consumers are left frustrated.
In yesterday's earnings call, Microsoft CEO Satya Nadella dropped a strong, but subtle, hint that Xbox Music and Video may be on the chopping block.
Quoting from the transcript, Nadella notes in passing:
The news of the Xbox entertainment studios shutting down came out last week as it was part of the general 18,000 layoffs from the company. The potential of Xbox entertainment studios was never realized, cut short before it had a chance to rise or fail. One could argue that Microsoft producing their own shows is veering dramatically off course for what is essentially a software company, making this the right – but tough – decision for Nadella.
However, the part where Nadella pronounces that they are streamlining their "investments in music and video" is troubling. As Microsoft watcher Paul Thurrott commented on Twitter on what "streamline" means he observes it "…doesn't mean maintain or expand, for starters."
Nadella seems to be pushing Microsoft back into its primary mission, and for Xbox One that is pure gaming. Microsoft shuttering Xbox entertainment studios is sensible, even if the prospect of a hit show is enticing (see Amazon and Netflix's success with producing their own series). Nevertheless, Xbox Music and Xbox Video, both of which grew out of Zune, seems like a natural extension of media in the living room and even more so for mobile. Nadella appears to be second guessing their investment in those services, calling into question their future. At the very least, Nadella is curtailing that group within the company.
Microsoft is undoubtedly in a tough position here. Companies like Amazon and Apple have already had a lock on streaming and music purchases. Toss in streaming juggernauts Spotify, or Pandora, and the argument for Xbox Music is a tough one to make. Is Microsoft stretching itself too thin just to reinvent the wheel? Better yet, what is the argument for Xbox Music and Video in terms of actual advantages to end-users (versus competing products)? Up until now Microsft has not differentiated themselves enough from their opponents, giving consumers little incentive to move forward.
I know many people have half-heartedly joked that Microsoft should just give up on Xbox Music, especially after the app situation on Windows Phone 8.1. Well, you may just get your wish.
Update 2:30 PM ET - Microsoft's Joe Belfiore has taken to Twitter to assure that his team is still working on the software for Xbox Music and Video:
In other words, the software that powers Xbox Music and Video will go on, though questions about Microsoft's commitment to the services still remain for some.
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Daniel Rubino is the Editor-in-chief of Windows Central, head reviewer, podcast co-host, and analyst. He has been covering Microsoft since 2007 when this site was called WMExperts (and later Windows Phone Central). His interests include Windows, laptops, next-gen computing, and for some reason, watches. Before all this tech stuff, he worked on a Ph.D. in linguistics, watched people sleep (for medical purposes!), and ran the projectors at movie theaters because it was fun.
They need to lock people in to an eco system properly. People don't leave Apple even if they're bored of it because all of their content is there. I use both services frequently across my surface, phones and Xbox One. All this restructuring makes me doubtful that I made the right choice to move back to MS two years ago...
They have apps on all major platforms, including Windows Store. I run in on my desktop using ModernMix. Quite nice.
Now my only difficult division will be Android or iPhone
It really sucks if that is the case because I have been a loyal and enthusiastic MS consumer for 19 years and this could be the last disappointment I can handle from them.
So what now? Access to all of these will stop?
So not happy if this occurs. SERIOUSLY! Also, going WP influenced and made it easy to move from Android and get a Surface. It was the ONE package that bought me here. No one package then going somewhere else becomes easier, SERIOUSLY!
Also what the fuck is Xbox one about then when all this is removed?? Then it's just a lesser gaming machine than the ps4. LOL
A streamlined train isn't half the train a normal train is, its just optimized for performance.
He also talked about streamlining Windows, so are they going to cut it down too? I doubt it.
I use Xbox Music daily and pay MS $10 a month for the streaming subscription, dropping/reducing Xbox Music would really alienate loyal customers like me.
Good lord they are so narrow minded. It's the reason why they keep failing!!!
They also need to streamline the monthly fee for their music streaming. And by streamline I mean CHOP IT!!!!
Xbox music and their all you can eat subscription method is one strong reason why I love my windows phone. I can download as much as I want and when I get tired of some music, I just delete it. Too much time and hassle to keep track of a large music library anymore.
The video side I am not so invested in. I have only bought one show, so no big loss. Amazon or others would take its place easily.
They can't have expenses that aren't really helping them in the long run. And no, I don't think these features would help them in the long run because obviously not a lot of people are using them. Which makes it not worth it in the end.
they should find someone more fresh and creative
Removing music and video would make the Xbox One a ridiculous device; a lesser gaming machine than the ps4. Rofl.
I am not believing this shit!
And yes, there's heavy compitition against Xbox streaming and music, video business.
Focuing in the core products and enhancing it is the right kind of work which will in future will lead Microsoft ro be successful.
And that is another cause of the immense piracy of media content here. :/
It is not rational to focus on productivity and ignoring entertainment side. Consumers want the whole experience from first party.
He is starting to make mistakes.
"instead of improving the service, why don't we just shut it down??.
And it will be sad if it's close... their own XBOX services, their visit card.
If MS discontinued or phased out their Music Pass I would be heartbroken and feel betrayed. Sure there are other services, but if Music Pass goes that means many other MS projects/services could follow.
$100 /yr for unlimited music isn't cheap, but it's nothing compared to purchasing music!
This is just like Xbox Music and to some extent Video, where you leave a hole in a dike the hole only gets larger and destroys the dike/dam.
Fill the hole and the dike stays strong.
I'm glad Microsoft is "embracing" productivity and its strong points, but just because there's competition in other areas doesn't mean you should take it all away from your loyal customers! You don't have to be the best at everything, Microsoft! There is room for others; diversity and a wide range of services is how you attract more consumers, not the opposite. "Gamers are people too." Did you forget about everyone else??
Where do you see the sales?
Xbox Musis pass is my #1 source for music. I hope they don't kill it.
I actually down graded from WP8.1 to WP8.0 just because I could not stand the music experience. This sucks.
2 free games per month.
2free Xbox videos per month less than a month old
And a free music subscription.
Satay's comment about focusing on games and gaming I completely contradictory when they have given up on xbox gaming in wp. So I don't understand why they would ditch music to work on something they have near on ditched???
Amazon instant video is relative new in comparison to xbox music/video. And we are comparing what should be a much more mature service like xbox music/video (especially if you include Zune) to a new service. This is insane for a company that makes this much money.