Why is Microsoft really leaving CES?

December 22, 2011

There's been a bit of back and forth today over Microsoft's announcement that it would be ending its long-standing CES keynote role, and will no longer have a booth at the show as it's done for many years. Head of Microsoft's corporate communications, Frank X. Shaw, posted a rather direct note about it on the company's blog, and the CEA confirmed the move on its blog.

Shortly thereafter, GigaOM posted a report that it wasn't Microsoft who initiated the end of the relationship, but the CEA itself. According to the article (via a source) "Microsoft didn't pull out of the keynote — they were kicked out."

Exciting stuff, one would think. However, we've spoken with sources of our own close to the matter, and it seems that the less exciting story is actually the most accurate one. Apparently last year the CEA requested that Microsoft sign on for another three-year deal for keynoting and presenting at CES. We're told that Microsoft declined that offer and accepted only a single year deal (covering 2012) — which would indicate a lead-up to the more comprehensive move the company announced today.

Our source did indicate that the CEA was interested in playing the field for the lead keynote address, and that Microsoft would ultimately have had to pony up more cash for the privilege of holding onto its spot (everybody at the show, even Microsoft, pays to exhibit and participate). As we were made to understand it, Microsoft simply didn't feel it was getting a reasonable return on its investment with CES, and the reality is that the show hadn't aligned with its launches for a few years.

The decision apparently was made in a truly amicable fashion, with neither side seemingly getting what it needed out of the relationship... which doesn't make for a very entertaining story.

What's really interesting about the news is that it marks a trend we've seen over the last few years of halo companies backing away from previously unassailable trade shows (Apple departing Macworld being the most obvious example). It seems like the Cupertino method of choosing the time and place for your product launches has firmly steeped in the mind of the industry, and it raises the question as to whether broader shows such as CES have the long-term staying power compared with more focused events such as E3 or Mobile World Congress.

This article originally appeared on theverge.com as The truth about Microsoft and CES.

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