TIME Video Games

Watch the First Trailer for Halo: Nightfall

+ READ ARTICLE

Microsoft released the first trailer for its upcoming live-action digital series Halo: Nightfall.

The series, which is being executive produced by Ridley Scott, will feature a new character named Jameson Locke, who is an agent for the secretive Office of Naval Intelligence. The series will be bundled with Halo: The Master Chief Collection, a compilation of past Halo games that launches this November.

MONEY Tech

Here’s a Look at How Apple and Microsoft Really Stack Up

On Tuesday, both Apple and Microsoft released their quarterly earnings reports, with Apple showing a 12.3% profit jump—and Microsoft showing a 7.1% decline. How do they compete on other measures? Here's a look at how the two tech giants stack up.

TIME Microsoft

Nokia Drags Down Microsoft Profits

Microsoft logo outside the Microsoft Visitor Center in Redmond, Wash.
Ted S. Warren—AP

The software firm took over of the fledgling cell-phone maker in April

Quarterly profits at Microsoft fell 7.1% even as revenues rose, due to the company’s April acquisition of cellphone maker Nokia, the software giant said in a quarterly financial report Tuesday.

Microsoft’s core software products—like Windows and Office—continue to sell well to other businesses; revenue on commercial sales rose 11% in the last quarter. That strong performance wasn’t enough to make up for operating losses at Nokia, which totaled $692 million.

The report comes on the heels of Microsoft announcing it will slash up to 18,000 jobs over the coming year. Most of those cuts, the company said, will come from Nokia. The workforce drawdown is the largest in the company’s 39-year history.

The report covers the fiscal fourth quarter, which ended June 30. Revenue for the period is up 18% year over year.

“Our solid execution and expense discipline allowed us to deliver a strong finish to the fiscal year,” said Amy Hood, executive vice president and chief financial officer at Microsoft.

 

 

 

MONEY stocks

What the Financial Press Isn’t Telling Us About Google and Other Tech Companies

Google on iPhone 5
Iain Masterton—Alamy

The search engine's ongoing struggles in mobile highlight problems cropping up throughout the tech sector — yet you wouldn't know it by the reactions of investors and the media.

This was an awful week for tech, as many of the sector’s biggest names announced disappointing results that point to slowing growth and troubled strategies.

Yet you wouldn’t know it by how the markets — or the media — reacted this week.

Late Thursday, the search engine giant Google reported the amount of money that advertisers are willing to pay whenever someone clicks on an online ad continues to fall. So-called “average costs per click” for Google fell 6% in the quarter, compared with the same period a year earlier. This continues a trend that’s been going on for some time. In the first quarter, for example, costs per click sank 9%.

There are two explanations for why this is happening and neither is good news for Google. One is that online sites are increasingly being viewed through mobile devices such as smart phones and tablets, and mobile ad platforms are not paying the premium that traditional web ads have. The other reason is that Google is no longer the only game in town when it comes to online advertising, and Facebook’s recent efforts to boost its mobile presence are clearly succeeding.

Yet instead, most news accounts focused on the rosier parts of Google’s quarterly results, such as the fact that overall revenues grew 22%.

The same thing happened all week throughout the sector:

* eBay

On Wednesday, the online auction site reported sales that fell short of the Street’s expectations. In fact, on a quarterly basis, revenues have been flat for several quarters. Instead, headlines focused on profits meeting consensus forecasts.

* Yahoo

The portal, which is making a huge push to try to be a big player in online advertising, reported on Tuesday that display ad revenues declined. Yet instead, many publications focused on how Yahoo’s mobile efforts were improving or that the company was going to sell a smaller-than-expected stake in Alibaba, the giant Chinese online retailer and auction site that is expected to go public later this summer.

* Intel

Intel shares hit a decade-high after releasing earnings results on Tuesday that showed better-than-expected PC sales expectations and overall revenue growth. As Reuters reported, chief financial officer Stacy Smith said “PC sales had stabilized, easing fears about the four-year decline in computer sales as consumers turn increasingly to tablets and smartphones.”

Great. That means the dying part of the industry is dying a little less rapidly than was previously thought. Meanwhile, investors glossed over the fact that revenues for the mobile and communications chip group sales were down 67% compared with the prior quarter and off 83% versus last year.

* Microsoft

The company announced the biggest layoffs in its history on Thursday, cutting its workforce by 18,000 — many of those coming from its recently acquired Nokia division. As MONEY’s Ian Salisbury reported, the historic cuts show how far this once-dominant tech company has fallen as it struggles to find its place in the sector. Yet many sites looked at the situation as glass-half-full, noting how the stock was rising on news that Microsoft was retrenching.

Of course, that’s what happens when investors fall in love with a particular group of stocks that have collectively posted a better-than-expected run. They start viewing those shares through rose-colored glasses.

TIME

PlayStation 4 Sweeps June Game Sales, While Mario Kart 8 Resuscitates the Wii U

Sony's PlayStation 4 (upper-left) and Microsoft's Xbox One (lower-right). Sony, Microsoft

Retail tracker NPD says June marked another up month for video games, led by sales of Sony's PlayStation 4 and Mario Kart 8 for Nintendo's Wii U.

You could argue that now we know why Microsoft sent out that bolt-from-the-blue Xbox One sales claim half a day before NPD’s June sales figures arrived: it turns out Sony’s PlayStation 4 was the top selling console for June 2014, while Nintendo’s Wii U snatched the top selling single game SKU with Mario Kart 8.

Let’s start with overall industry sales, which saw something of a spring banquet when May 2014 came along and year-on-year retail hardware, software and accessories sales soared by 52 percent.

June 2014 saw further year-on-year growth across retail hardware, software and accessories categories by 24 percent over June 2013. Once again, the key factor was hardware sales growth of 106 percent (in May, by comparison, hardware growth was 95 percent year-on-year), offsetting declines in portable hardware sales.

As usual, we don’t have unit sales specifics, but Sony claimed victory for next-gen software sales in an email, writing that the PS4 “[led] two of the top three titles” (Watch Dogs, FIFA 14) and was first in unit sales “for the sixth consecutive month.”

Nintendo, for its part, claimed Mario Kart 8 (reviewed here) was June’s top-selling game and gave us a few rare figures: 470,000 physical and digital units sold in June, bring the total to more than 885,000 units sold (in the U.S. alone) in the game’s first five weeks. Nintendo says June 2014 Wii U sales are up 233 percent over June 2013, while Wii U software sales are up 373 percent for the same period.

I’d list NPD’s physical software sales, but at this point it’s getting too confusing: Watch Dogs was the top-seller (over Mario Kart 8) across all platforms if you ignore digital sales, but as noted above, Nintendo says Mario Kart 8 was the top-selling game once you factor in digital sales. (If I were NPD, I’d either figure out how to fold accurate digital sales into the rankings, or stop publishing the physical software sales chart entirely.)

While NPD says portable sales declined year-on-year, Nintendo notes that June 2014 3DS sales were up over the prior month by more than 55 percent, driven in part by sales of Tomodachi Life (175,000 digital and physical copies sold).

We’re now well into an extended up-trend, too: NPD says nine of the last 10 months saw year-on-year growth, thanks primarily to the new console launches last November, but NPD notes that growth trend started with software sales in September and October 2013 (in other words, Grand Theft Auto V — still listing in NPD’s top 10 chart for June 2014 software sales, incidentally).

What’s next: July 2014′s going to look pretty sleepy, sales-wise, and we’ll probably see declines across the board, though the Destiny beta that kicked off on PS4 and PS3 yesterday, adding Xbox One and Xbox 360 next week, could bolster hardware sales. The Last of Us for PS4 should do reasonably well, but it doesn’t launch until July 29. August is pretty quiet until Diablo 3 (for PS4 and Xbox One) comes along on August 19, followed by the latest Madden NFL on August 26.

But it’s September everyone’s waiting for: Assuming Destiny and The Sims 4 don’t suck, those two alone could well set sales records.

TIME Microsoft

Making Sense of Microsoft’s Windows Phone Plans

Satya Nadella, chief executive officer of Microsoft Corp., speaks during a keynote session at the Microsoft Worldwide Partner Conference in Washington on July 16, 2014.
Satya Nadella, chief executive officer of Microsoft Corp., speaks during a keynote session at the Microsoft Worldwide Partner Conference in Washington on July 16, 2014. Bloomberg/Getty Images

Microsoft's low-end push doesn't exactly match up with its high-end ambitions.

Microsoft CEO Satya Nadella is wasting no time distancing himself from his former boss, Steve Ballmer.

After making clear last week that Windows is not the center of Microsoft’s universe anymore, Nadella took another swing at his predecessor’s “devices and services” strategy by announcing 12,500 layoffs at the Nokia team. Combined with the 5,500 layoffs at other parts of Microsoft, it’s by far the largest round of job cuts in company history.

With the layoffs will come a shift in strategy. Microsoft says it’ll push harder into low-cost Windows Phones, while terminating Nokia’s other affordable phone projects. Nokia X, an experiment in putting Microsoft services on Android-based handsets, will go away as Microsoft loads future designs with Windows Phone instead. Nokia’s other low-end platform, Asha, will also disappear, according to The Verge.

On the high-end, Microsoft sees Windows Phone–and other devices like Surface–as a showcase for Microsoft services. Future flagship phones will be timed to launch alongside major versions of the operating system and new releases from Microsoft’s Applications and Services Group.

One might imagine, for instance, a future Windows Phone integrating a new version of Office, or an upgrade for Cortana that works across phones, tablets, PCs and Xbox consoles. Microsoft will likely pitch its hardware as being the best way to experience those services. (“We want to show the way,” Nadella said at the Worldwide Partners Conference last week.)

The problem is that Microsoft’s high-end and low-end strategies don’t really square with one another. While Microsoft has enjoyed some success in the affordable phone market, the company’s newfound focus on productivity and “getting stuff done” mean that those high-end users are the real prize. They’re the ones who are most likely to use premium Microsoft services like Office 365 and OneDrive.

From Nadella’s latest memo, it seems Microsoft is committed to the low end mainly because it’s done well in certain markets. But how does that help Microsoft with its productivity focus?

One could argue that building the user base, even with low-cost phones, helps attract the app developers that Windows Phone really needs. But low-end users don’t necessarily spell dollar signs for app makers. Apple’s iOS App Store, for instance, pulls in far more revenue than Android’s Google Play Store, despite Android having far greater market share. Windows Phone has neither the volume nor the demographics to lure app developers on a large scale, and cheaper phones aren’t going to change that.

That’s why I think Windows Phone’s best shot at survival will come from deeper hooks into other Microsoft products that people use already. As I wrote in my Windows Phone 8.1 review, things like tighter OneDrive integration, better Office tools and more links between phone and console gaming all come to mind.

Microsoft is rumored to be moving in this direction with a unified version of Windows codenamed Threshold, which is reportedly coming next year. It’ll be interesting to see what Nadella does between now and then.

TIME Microsoft

Microsoft Is Shuttering Xbox Entertainment Studios, but Halo TV Series Lives On

Corporate Vice President of Microsoft Studios Phil Spencer speaks at the Microsoft Xbox E3 2012 media briefing in Los Angeles on June 4, 2012.
Corporate Vice President of Microsoft Studios Phil Spencer speaks at the Microsoft Xbox E3 2012 media briefing in Los Angeles on June 4, 2012. Robyn Beck—AFP/Getty Images

The studio, created just a few years ago and employing some 200, will close its doors immediately.

This is the kind of day Microsoft’s having: first, the company announced it was laying off 18,000 employees, most of those from the company’s recently purchased Nokia division.

Now, in the wake of that bombshell, the company says it’s closing Xbox Entertainment Studios, its nascent interactive entertainment wing formed in 2012 to create original television content for the company’s Xbox Live online service. On the chopping block are roughly 200 jobs in California and British Columbia (it’s not clear if all 200 are layoffs, or whether some of those jobs will wind up reshuffled within the company).

Bearish as analysts have been about Microsoft’s Xbox program in general, and especially in light of CEO Satya Nadella’s recent assurances about Redmond’s commitment to the Xbox brand, I’m not sure anyone saw this coming (and despite the fact that in hindsight Nadella said nothing specific about Xbox Entertainment Studios in that note — I assumed, as I’m sure most did, that when he talked Xbox, he meant the whole enchilada).

Xbox Entertainment’s biggest projects were arguably Halo: Nightfall, an upcoming digital feature, and a Halo TV series staged in the popular sci-fi universe and produced by Steven Spielberg. Xbox Entertainment’s closure doesn’t spell the end for those projects or even of Microsoft’s interest in original programming, but it means the scope for such projects will change.

After the closure announcement, Microsoft Studios head Phil Spencer issued a memo committing to original programming “already in production,” including the documentary series Signal to Noise and both Halo: Nightfall and the Halo TV series, “which will continue as planned with [Halo developer] 343 Industries.”

Xbox will continue to support and deliver interactive sports content like ‘NFL on Xbox,’ and we will continue to enhance our entertainment offering on console by innovating the TV experience through the monthly console updates. Additionally, our app partnerships with world-class content providers bringing entertainment, sports and TV content to Xbox customers around the world are not impacted by this organizational change in any way and remain an important component of our Xbox strategy.

Despite Spencer’s assurances, this is Microsoft pretty clearly hitting the eject button on a dedicated content-creation studio shortly after takeoff. It’s not clear what went wrong, or even if something did. My guess would be that Nadella viewed the studio’s standalone existence in the company hierarchy as too far outside his reimagined (or, you could argue, doubled-down-on) wheelhouse, that wheelhouse being “a productivity and platform company for the mobile-first and cloud-first world.”

Read through Nadella’s missive again, and in view of what’s happened, it’s easier to see how Xbox Entertainment Studios hit the cutting room floor today, though that’ll do nothing to assuage studio talent fresh out of a job.

MONEY Microsoft

Why Microsoft Is Laying Off 18,000 People—During a Tech Boom

It's tough to be a desktop giant in a mobile app world.

+ READ ARTICLE

At a time when young social-media companies are being snapped up for billions and private investors seem eager to throw money at even kooky-sounding ideas—Yo!—Microsoft, that stalwart of the last great tech boom, has struggled to gain its footing. If you can call posting $5 billion in profits each quarter struggling. The upshot: A company that once seemed almost as if it could print money at will plans to cut 18,000 jobs over the next year.

What changed? While Microsoft once seemed to have locked up the PC market, the rise of smartphones and other mobile devices has opened up new avenues for competitors. Here’s how Microsoft lost it’s mojo in three charts:

Mobile killed the PC star

Microsoft earned a fearsome reputation in the ’80s and ’90s for locking up the personal computer market with its Windows operating system and productivity add-on Office. It even endured a painful antitrust case, when this feat seemed to give it an unshakeable grip on the computing sector. But then came the smartphone and the tablet. Today PC sales are declining. So while there’s a good chance you’re still using Windows in your cubicle at work, once you get home you’re watching movies on your iPad or playing games on your Andriod phone. PC sales have tumbled, something that’s only expected to continue. Fewer PCs, ultimately means, fewer copies of Windows and Office.

IDC Worldwide Quarterly PC Tracker, May 2014

Windows Phones haven’t broken through

Of course, Microsoft has tried to fight back. It’s newest version of Windows — Windows 8, released in 2012 — was designed to specifically to bridge the gap between PCs and tablets. But so far it’s failed to win many fans. Microsoft also tried to crack the smartphone market. It’s Windows Phone, released in 2010, has similarly failed to catch on. That’s one reason it acquired Nokia’s mobile phone division in April. Indeed, many of the layoffs will be tied to integrating this division. The jury’s still out on how the move will work, but Microsoft’s got a lot of ground to make up…

Operating system market share by unit shipments IDC

And Wall Street is demanding a change

The upshot is that a company which is still making money hand over fist — it’s got $88 billion in cash on its balance sheet — can look like it’s struggling. Life — or at least the stock market — is about keeping up with the Joneses.

YCharts

When the Joneses are Apple and Google, it’s not easy.

TIME Companies

Microsoft to Cut Up to 18,000 Jobs

Microsoft CEO Satya Nadella gestures during the keynote address of the Build Conference in San Francisco, April 2, 2014
Microsoft CEO Satya Nadella gestures during the keynote address of the Build Conference in San Francisco, April 2, 2014 Eric Risberg—AP

Most of the cuts will come from Nokia, which it bought in April

Correction appended 11:o9am ET

Software giant Microsoft Corp will cut up to 18,000 jobs over the next year, it announced in a press statement Thursday.

The company said the cuts are part of “a restructuring plan to simplify [the] organization and align the recently acquired Nokia Devices and Services business with the company’s overall strategy.”

The bulk of the cuts, around 12,500 professional and factory positions, will come from the Nokia business, which Microsoft purchased for $7.2 billion in April. The acquisition brought Microsoft’s headcount to around 127,000 staff.

The cuts, which will be fully completed by June 30 next year, are the largest in Microsoft’s 39-year history. In 2009, former Microsoft CEO Steve Ballmer cut 5,800 jobs or 6 percent of staff to stem the effects of the recession.

The plans were announced in an email from Microsoft CEO Satya Nadella, who was appointed in February. This email follows Nadella announcing plans for a “leaner” business in an open note to employees last week.

Nadella’s cuts may be an attempt to make Microsoft more competitive against Google and Apple. Computer-maker Hewlett Packard has also announced job losses with plans to cut 50,000 of their 250,000 workforce over the next three to five years.

Correction: This article originally misstated how many staff joined Microsoft with the Nokia deal. It was around 32,000.

TIME Video Games

Microsoft Claims Xbox One Sales Doubled Since Price Cut

Microsoft

But since Microsoft won't release unit sales figures, we have no way of gauging what that claim actually means

The Xbox One’s price drop from $499 to $399 in early June is apparently paying dividends: Microsoft says in an Xbox Wire post that Xbox One sales have more than doubled since the company began selling a Kinect-less version of its flagship games console on June 9.

The “more than double” claim is based on undisclosed May sales, and Microsoft says its data stems from sold-through units, meaning purchases, not just units shipped to stores. The company adds that Xbox 360 growth is “solid” as well.

The update comes in advance of NPD’s June video game sales figures, due later today. The XBox One slashed prices earlier this summer to parity with Sony’s PlayStation 4, which also retails at $399.

Since NPD stopped providing unit sales breakdowns years ago, and Microsoft didn’t provide specific May figures, it’s impossible to gauge or even much guess at what “more than double” means. Microsoft could have sold a dozen Xbox Ones in May (making June’s take a whopping 24!), or it could have sold half a million. All we know for sure, taking Microsoft at its word, is that Xbox One sales are up.

The last these companies talked unit sales specifics (around the end of March), Sony said it had sold-through some 7 million PS4s *, Nintendo that it had sold-through just over 6 million Wii Us, with Microsoft bringing up the rear at around 5 million Xbox Ones shipped to stores.

* Edge apparently reported in early July that Sony had sold 9 million PS4s, but Sony has not confirmed.

Your browser, Internet Explorer 8 or below, is out of date. It has known security flaws and may not display all features of this and other websites.

Learn how to update your browser