Microsoft shakes up consumer business with the departure of Bach and Allard

Microsoft announced a major shake up of its Entertainment & Devices Division on Tuesday.

Both Robbie Bach and J Allard, the men behind Xbox and Zune, are departing the company. The departures signal a massive reorganization for Microsoft's management of its struggling mobile division and Xbox/Zune devices. Rumours suggested that Allard's departure was due to the Microsoft Courier project cancellation but in an interview with TechFlash he denied this and also confirmed he doesn't plan to work for Apple, Google or any other Microsoft rival.

“J has brought a game-changing creative magic to Microsoft for years, from Windows to Xbox, from Zune to KIN,” Ballmer said. “He was one of the key drivers in our early work on the Web, and we’re absolutely delighted that J’s role with the company will evolve in a way that lets all of Microsoft benefit from his business insight, technical depth and keen eye for consumer experience.”

Bach, President of the Entertainment & Devices Division, will not be replaced. This leaves the current Xbox and Windows Mobile leaders to report to Ballmer starting on July 1. This broader restructuring will give CEO Steve Ballmer more control of Microsoft's consumer products like Xbox and Windows Phone. “For the past 22 years, Robbie has personified creativity, innovation and drive. With this spirit, he has led a division passionately devoted to making Microsoft successful in interactive entertainment and mobility,” Ballmer said. “Robbie’s an amazing business person and close personal friend, which makes his departure a point of sadness for me. However, given the strong leadership team he has built, the business performance of E&D this year and the launches of Windows Phone 7 and ‘Project Natal’ this fall, we are set up well for success as we continue to drive our mobile and entertainment businesses forward.”

So what does this huge shake up mean for consumers? Microsoft has been struggling to compete with Apple's iPhone and Google's Android devices in the mobile space. Consumer awareness of both competing platforms and mindshare focus has shifted to iPhone and Android devices. HTC, once a huge backer of Windows Mobile, has moved the majority of its high end products to Google's platform until Windows Phone 7 arrives. If the shake up works then consumers can expect to see great advances with Windows Phone, Xbox and Zune. Both Windows Phone and Zune have struggled to hold or gain market share in the U.S. 2010 is set to be a strong year for the Xbox as game makers continue to release the top games on the platform. Microsoft is also planning to release the Project Natal controllerless game system for the Xbox 360 later this year.

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