Microsoft Shakes Up Game and Mobile Device Division

May 25, 2010
Ballmer may be taking tighter reins over Microsoft's mobile strategy.

Microsoft on Tuesday announced it is replacing top executives at its gaming and mobile devices division, which has stumbled in the smartphone and tablet computer markets.

Robbie Bach, 48, will retire by year's end from his post as president of the Entertainment and Devices Division.

Entertainment devices chief technology officer James "J Allard will also leave Microsoft, becoming a strategic adviser to chief executive Steve Ballmer.

Don Mattrick will remain as head of Microsoft's Interactive Entertainment Business and Andy Lees will remain in charge of the Mobile Communications Business but both men will report directly to Ballmer as of July 1.

"I've been so fortunate to spend more than two decades of my life working with incredible people and doing amazing things like launching Office, Xbox and Xbox Live, the 'Halo' franchise, Windows Phones, Zune and more," said Bach. "I have the utmost confidence in Steve, Don and Andy and their ability to see through our mission of bringing extraordinary entertainment and mobility experiences to life for people around the world."

Bach, who joined the company in 1988, added that he intends to spend time with his family and non-profit work.

"You never know if they decided to leave or were nudged," said analyst Matt Rosoff of Directions On Microsoft, a private firm devoted to tracking the U.S. technology colossus. "It looks like Ballmer is taking tighter reins over Microsoft's mobile strategy."

Microsoft's videogame business has been doing well, with strong sales of Xbox 360 consoles and titles.

Microsoft is expected to be a star next month at a major Electronics Entertainment Expo with "Natal," technology that will let players use Xbox 360 consoles with natural gestures instead of handheld controllers.

It is in the hot smartphone and tablet computer markets that Microsoft has suffered setbacks that had industry insiders convinced that mobile division executives were in Ballmer's crosshairs.

"You see press reports where it is Google vs. Apple and Microsoft isn't even considered a player," Rosoff said. "It has got to be frustrating for them."

Apple iPhones have become must-have devices and Google is seizing market share with smartphones based on its Android software.

Long-time Microsoft partner Hewlett-Packard recently announced it is acquiring Palm and intends to use that company's operating system for mobile devices such as smartphones and tablet computers.

That announcement was seen by some as an embarrassment for Ballmer, who showed off an HP tablet computer based on Windows Mobile 7 software at the major Consumer Electronics Show in Las Vegas in January.

"Games division is in good shape, mobile is where they need help," Rosoff said of Microsoft. "If HP decides to build on another system, that hurts the crown jewels."

The analyst believes that the success of Apple's freshly-launched iPad tablet computers and indications that such devices based on Google-backed software are on the way were among factors behind the shake-up at Microsoft.

"Microsoft has had a mobile platform for years and it has lagged," Rosoff said. "Now, they are trying to catch up."

Microsoft's new version of its Windows mobile operating system due for release later this year "is going to be a big reset" but will come after iPhones have had nearly four years to win fans.

Microsoft mobile and entertainment was also the division behind a Surface computer that built touchscreen control capabilities into table tops and other large areas. It is also the unit behind Zune media players that Microsoft fielded to challenge iPods made by Apple.

"You look at the division overall and they have had interesting progress but no big financial success," Rosoff said, adding that he expected Ballmer to make more changes in the department.

Copyright Agence France-Presse, 2010

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!