December 15, 2005 9:51 AM PST

Microsoft to retune entertainment group

Microsoft on Wednesday told employees that it has split its entertainment and devices division into four distinct business units, according to an internal memo seen by CNET News.com.

The reorganization comes after a major reshuffle at the software giant in September, when the entire company split into three large divisions, each with its own president.

At the time, the company said it would set up a business division headed by Jeff Raikes, a platform product and services division led by Kevin Johnson and Jim Allchin, and an entertainment and devices division run by Robbie Bach.

The major overhaul was designed to streamline the company's decision-making processes and boost product development, Microsoft CEO Steve Ballmer said in a statement at the time.

On Wednesday, according to the memo sent by Bach to employees in the entertainment and devices division, Microsoft set the transformation into four distinct units in motion. The unit leaders will be part of Bach's executive team.

"In September, Steve announced some significant cross-company organizational changes intended to achieve greater agility, better manage future growth, and drive our software-based services strategy. Today, I'm excited to share the plan for how our new Entertainment & Devices Division will align itself to deliver on these company-wide objectives and the E&D charter while simultaneously ensuring our continued focus and momentum on existing efforts," Bach wrote in the memo.

Evident in this news are signs that Microsoft is rewarding those behind the recent launch of its next-generation video game console, the Xbox 360.

The division leaders and their responsibilities:

• Bryan Lee, currently a vice president and the finance chief of the Xbox division, will head up a new entertainment business unit that will oversee Microsoft's blossoming digital video, music and television programs. Part of Lee's area of oversight will be Microsoft's Internet Protocol TV efforts.

• Peter Moore, a vice president who manages Xbox marketing, will run the new Interactive Entertainment unit. Moore's responsibilities will include not only the Xbox, but also the Games for Windows business. In this capacity, the unit will also support the launch of Windows Vista.

• Pieter Knook remains as the leader of the company's mobile and embedded business.

• Tom Gibbons continues as the leader of Microsoft's consumer productivity experiences unit, a group that includes its mouse and keyboards business.

J. Allard, a vice president who was the face of the Xbox 360 launch effort in November, will operate the new Experiences and Design for Gaming and Entertainment Group. This group will oversee the vision, product road map and user experiences across the division's four units.

Still, there's no doubt that Bach is the unquestioned leader of the reorganized entertainment and devices division.

"My role is evolving to focus more on longer-term strategy, partner relationships and business management within E&D and across the company," Bach wrote in the memo. He further noted, "The market is rife with new opportunities, yet we face a strong group of competitors."

Those competitors include Google, which is on a seemingly never-ending run of acquisitions designed to bolster its Web-services offerings, as well as Oracle, which has also been buying smaller outfits left and right.

4 comments

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Looks like....
..... MS is finally hearing the thud of the competitors' footsteps
about to run up MS's back. So it is certainly time to shift into a
defensive formation. Will it work??? Probably not as much as it
needs to. This may be more of a paint job than an actual structural
change.
Posted by Earl Benser (4310 comments )
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A Day Late and a Dollar Short
I agree, however, Microsoft should have postered itself long ago instead of waiting until its competitors got a leg up on them. It seems Microsofts innovation is a result of another company's successful entry into a new market or an enhancement/extension of an existing one rather than Microsoft creating the space themself. I wish them well but as within competitive sports, there is always a new champion on the horizon...
Posted by pilaa (253 comments )
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Quote from Petronius (a first Century Roman)
But it's still so relevant in so many situation today:

"We trained hard - But it seemed that every time we were beginning to form into teams, we would be reorganized. I was to learn later in life that we tend to meet any new situation by reorganizing; And what a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralization."
Posted by aabcdefghij987654321 (1721 comments )
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