Steve Ballmer was an underrated CEO

Satya's tenure has seen the fall of Xbox, the lost relevance of Windows. While moving to a services model is going to be very lucrative for them, they risk competitors offering swap-out models.

Recall Recall??

Gamepass and the lack of first party exclusives both seem like moves to kill the console in the long term, but as of now it's still a serious competitor to playstation and switch no?

In which region? It's basically irrelevant outside the US.

Nintendo's always been on its own for these sorts of things, but even the folks I know with an XBox just use their Playstation these days if they have both. XBox just isn't really in the conversation any more. That could totally change in another generation of consoles, but their position wasn't great coming into this generation and it doesn't feel like it's gotten any better.

Basic numbers I've been seeing on a quick search has PS5 almost doubling the Series X sales.

Not really. The only generation of Xbox that was competitive was the 360, which still came in third in sales, just not as distantly.

The fall of Xbox started with the Xbox One, which was developed and released while Ballmer was CEO. They put an enormous amount of investment into that console, but made some bad calls in both its development and marketing that put them in a deep hole that they've been unable to get out of since. The increasing backwards compatibility of modern consoles means that the current 4th generation Xbox is paying for the sins of the 3rd generation in addition to dealing with its own struggles. Really the only thing that can fix the situation is money, but the business is probably under pressure to show profits after two decades of heavy investment with minimal return.

I don't necessarily think you can blame Ballmer for the missteps the Xbox team made, but I definitely think you can't blame Nadella.

Having Halo as an exclusive was huge.

Windows was already losing relevance in the data center when Nadya took over -because of Linux. At AWS in 2008 / 2009 adoption was all about LAMP stack - AWS's tools were all geared for LAMP. AWS offered some Windows + SQL Server licenses on their cloud, however it was a struggle to get a deal (any deal) with Microsoft.

On the mobile side Windows was losing relevance to iPhone - which Ballmer so famously derided.

Satya figured out that with cloud computing Microsoft would still interpose between hardware makers and the customer - and the results show. (Why hardware makers do not figure this out for themselves is a different topic..)

Yes, one can't blame Ballmer for the missteps of the Xbox team directly (that honor goes to Don Mattrick, VP in charge of IEB at the time of the Xbox One launch). Divisional VPs get a lot of latitude in how they run their org. However, Ballmer does have to accept ultimate responsibility for allowing Mattrick to head up IEB and how long he allowed him to stay there.

Valve figured it out when making the Steam Deck. But they're a brilliant exception that makes your point.

I agree with this. And it wasn't just Don Mattrick. Late in Ballmer's tenure there were a lot of VPs with poor track records who weren't being held accountable (or, in some cases, were being given more responsibility). Microsoft is still feeling the impact of those people today.

> the lost relevance of Windows.

Yes but this doesn't matter. The market has evolved.

macOS has also lost a lot of relevance in Apple's world, but it doesn't matter. Because they are raking it in by the billions on the iPhone.

> Why hardware makers do not figure this out for themselves is a different topic

Have you _seen_ the typical software produced by hardware makers?

XBox's irrelevance is thanks to Don Mattrick for ruining the XBox One release.

It is fair to point out that XBox continues to stagnate and despite many billions of dollars that Microsoft has pumped into gaming and acquiring numerous studios and publishers, they still have yet to succeed in that area.

Out of curiosity, what do you see as the fall of Xbox? It seems to work fine to play games, even if they had missteps with certain things (eg. Kinect being deprecated after being mandatory, some hardware issues).

> Out of curiosity, what do you see as the fall of Xbox?

The ever-declining hardware revenue and market share. If the decline that started in 2013 continues long enough it will stop making sense for Microsoft to sell consoles at all. They seem to be planning for this, as they're clearly pivoting the Xbox business towards "content and services".

This is a stark contrast to how Xbox was positioned prior to the 3rd gen. Xbox One. They had taken significant market share away from PlayStation and they were expecting to continue to do so, particularly outside the USA. They were also trying to get a foothold in the household computing market (this market was in its infancy then, now: Alexa/Fire TV, Nest/Chromecast, Apple TV/HomePod). Those ambitions are gone.

In Apple's case, the lost relevance of one platform lead to the increase in relevance of another one - that they controlled. Microsoft has no such "luck".

Also, it does matter, because there's over a billion Windows PCs in active use. It's still relevant, but it's getting eroded. That's a huge issue.