In a press release today, Microsoft has announced that they are acquiring the Devices and Services division of Nokia. This follows news that activist investor ValueAct, who want Microsoft to get rid of Xbox, may soon join their board of directors.
Call it the first of Steve Ballmer’s final shots. The purchase includes licensing of Nokia’s patents and mapping services, which will stay in the parent company. Nokia CEO Stephen Elop and several other employees are moving to Microsoft as part of the move with Elop to eventually take over a new devices division. Microsoft will be paying a total $ 7 billion to Nokia shareholders, subject to approval from the board of directors and to be made effective by next year.
Just a few days ago, Microsoft opened themselves up to activist investor group ValueAct, one of the company’s biggest investors. ValueAct has expressed unhappiness with how Microsoft has been doing their business, going so far as to call for them to get rid of Bing and Xbox.
Yes, you read that last part right. There is now a serious possibility that Microsoft will either spin off or completely sell their Xbox division. As analyst Rick Sherlund has pointed out prior to ValueAct’s entry, the investment world sees Xbox as a cool brand, but one that doesn’t make enough money to be worthwhile.
I know this all sounds like dark times for Xbox One, but all of these changes going on with Microsoft for the past few weeks should not affect the Xbox One launch for at least a year. Julie-Larson Green is still in charge of Xbox, Ballmer will definitely still be around long after launch, and Nokia does not affect them directly. Team Xbox’s challenges with communication and their pending launch are their own, at least for now.
