First, I think he misunderstood what Iwata meant. Iwata was talking about not trying to match strengths with Sony and Microsoft but to rather concentrate on their own strengths.

Second, he's somewhat right about how people perceive the Xbox brand, though that really isn't Microsoft's fault. People were getting a little crazy by assuming that the Xbox brand would grow market-share at the same rate as the 360. That was really unlikely from the very start.

In reality, the Xbox brand is still weaker, globally speaking, than the Playstation or the Nintendo brands. It's far easier to grow from zero than from a close third. It took everything lining up perfectly for the 360--the biggest FPS at the time, a year's head start, monumental mistakes from Sony--the odds were against the stars aligning perfectly once more. They're going to have to fight for every inch gained this generation.

yeah, follow that link back to the original article.  It is an analyst that is saying that, not the investors.  Like I said, unconfirmed.  The investors haven't and won't publicly say what they want to do, because they are looking for a spot on the board.  Something that activist investors tend to do.  Just like the activist investors did with yahoo to try and get them to sell to microsoft, and as we know yahoo is owned by microsoft... oh wait, they aren't... Also, doesn't prove anything against what I said.  Investors might want to lose the xbox division because it doesn't make enough profit to be worth it to them, not because it doesn't make a profit. Like I said, the 360 made a profit, but in microsoft terms in was very small...

Regardless, ValueAct wants to see "big changes" in mircosoft. I'm not sure if they included the xbox divison but it's plausible since the xbox brand hasn't even broke to even yet!

Anyways, where's kowenicki and sales2099 when you need a view from them in this thread ?

What does it matter, they are activist investors.  They invest in companies to try and break them apart or sell them off for a quick buck before they divest.  That is what they do.  

Also, just because they haven't broken even yet (which also may not be true) doesn't mean you want to sell the division off.  If a product is on an upward trend, like the xbox, then you keep at it.  The x1 is looking like the hardware will be sold at a profit from day 1, I don't see how these activist investors could convince the other 95% of the investors to sell off a division that is currently making a profit.  Even if historically the division hasn't been profitable, all that matters  is the current reality for investors.  

Interesting Article... But MS has also been in the console business for much less time than both Nintendo and Sony so its hard to tell

@Bold They haven't broke even yet.

You can clearly see this so no questions about it. 

The xbone is looking more and more likely to sell less the xbox 360 so I don't see the xbox divison going in an upward trend and that looks like the current reality.  

I have a decent amount of MS stock (decent amount for me, not for the entire company obviously) and I have heard these ramblings over the past 8 years. Nothing has come out of it yet, but they are definitely getting louder. All I will say on that.

I also own a decent amount of Sony stock (same as above) as well. Sony is much more invested, from all standpoints, on Playstations success. They are moving the company more and more into a Playstation Focus, cause honestly they have to.

Hey, don't forget about their smartphones, they have being doing extremely well there too. ;P

You know what is interesting about that graph that is somehow not sourced?  that the xbox division hasn't posted a loss in 5 years.  How is going from 5 years of loss to 5 years of profits not an upward trend?  Why would a company look a division that has sustainable profit and say, hey, lets cut this?  Sony lost even more over the same period, their losses are at around 5 billion.  Should Sony be looking to sell their gaming division?  Nintendo has lost money the last two years which is honestly worse than both microsoft and sony as they don't have any other divisions to support it.  Should nintendo be looking to sell out?  

Also, where do you get the x1 is looking like it will sell less than the 360?  It looks to easily outsell the 360 launch, Microsoft has even said the preorders are way ahead of the 360.  Also, the 360 launched TERRIBLY.   Microsoft certainly screwed up the reveal, but they have rebounded nicely.  With Nintendo screwing up their console, there is a big slice of marketshare out there up for grabs.  Sony will grab most of it I'm sure, but I have a hard time seeing microsoft doing worse than the 360 with the x1.  It looks like it will easily match if not better the 360 sales.