Why Microsoft shouldn’t put the future of the Xbox One in Stephen Elop’s hands

This week, Microsoft finally decided what to do with Stephen Elop following its acquisition of Nokia, and while it wasn’t quite insane enough to hand him the entire company, it’s decided to give him control of the entire Xbox division. After Don Mattrick left in the wake of the Xbox One’s disastrous debut last year, Microsoft turned to the highly regarded Julie Larson-Green to head the program, which she did for the past six months.

Larson-Green is moving over to take a role as the company’s Chief Experience Officer, heading up the My Life & Work team. While her experience at Microsoft prior to helming the Devices & Studios division was tangential to Xbox development, she had worked for the company for 20 years and was seen as a solid choice for the role. Elop’s only comments on Xbox, in contrast, came during his evaluation as a potential CEO for the entire company, when he reportedly was open to selling off the entire games division.

How bad could he be?

Wikipedia summarises this nicely:

“During the 3 years Elop was Nokia CEO, Nokia revenues fell 40 per cent, Nokia profits fell 95 per cent, Nokia market share collapsed in smartphones from 34 per cent to 3.4 per cent, Nokia’s credit rating went from A to junk, Nokia’s share price dropped 60 per cent in value and Nokia’s market capitalisation lost 13 Billion dollars [£7.8 billion] in value. The Financial Times calculated that Nokia shareholders ended up paying Elop a bonus of 1 million Euros for every 1.5 billion in market capital that Elop was able to destroy while Nokia CEO.”

Elop’s decision to turn Nokia into a Windows Phone-only shop created some great Windows Phone devices that absolutely no one wanted to buy. The abrupt cancellation of MeeGo caused profound headaches for Intel, and wrecked the market prospects for the otherwise impressive Nokia N9. His sole achievement while at the Finnish company was to so utterly destroy its market value as to make a Microsoft acquisition a praiseworthy alternative.

There’s no reason to regard this as a positive step for Microsoft, the Xbox One’s future, or gaming in general. Elop may have done credible work during his first tenure at Microsoft, but his disastrous tenure at Nokia wipes such modest gains clean off the map. For a company straining to reposition its underperforming console as a credible games machine, Elop is perhaps the last man we’d pick for the job. Elop will also be in charge of Microsoft’s Surface program, though that division has underperformed expectations so significantly it’s hard to imagine he could make it worse.