If one were to accept that the XBOX business is losing $2B per year, what would one attribute those losses to relative to Sony's Playstation business, which from all accounts is not losing that much money and doesn't have $2B in Android royalties to prop it up? Based on the information that we have, how does this make any sense?
Analyst claims Xbox losing $2 Billion per Year; Suggests it should be dropped
- Thread starter BoardBonobo
- Start date
Sorry but not necessarily. Many businesses in industries where profit margins are generally small, such as the one I work in at the moment, prioritise market share over hard cash. MS is sitting on a mountain of cash and on top of that are turning a much higher profit than my company as a whole. So they can surely afford to go after market share in strategic markets such as Xbox (dominate the living room) or mobile phones, which are long term investments, at the expense of short term worries such as profit.
Unless theyve changed where they place it, the thing youre looking for is called Mac office
How much profit does mac office give MS per year? back of the envolope calc's at least 2 billion!
though I dont think the xbox is losing that much money, I'ld say it would be breaking even ~10% either way mainly due to xbox live
MS is owned by its owners. They control it.
Bagel seed
Veteran
If this is true, we could very well see another Dreamcasting this gen. Hang on to those OG units boys 
What kind of awful society do we live in that people don't view equity purchases as a way of donating Xboxes to needy gamers?
If this is true, we could very well see another Dreamcasting this gen. Hang on to those OG units boys
Call me when EA drops support for MS.
Some analyst is reported to have said the EDD is losing $2.5 billion a year but that's hidden from investors by $2 billion in android fees. This same analyst attributes $2 billion losses per annum to Xbox, despite financial showing an operating profit. This analyst doesn't provide any explanation or evidence, at least not in the article reporting it.
XBOX live revenue is making them money, but their complete and utter lack of focus is making their entertainment division lose money ... for every quarter of fat xbox live subscription revenue they invent some fuck up to drain it all away (and fail to earn back the huge costs they incurred in the past to get to this point).
The entertainment division is just a distraction.
The entertainment division is just a distraction.
ArcticCircle
Newcomer
Microsoft CEO candidate Stephen Elop said to consider selling Xbox business, killing Bing
http://www.theverge.com/2013/11/8/5080192/microsoft-ceo-candidate-stephen-elop-bing-xbox-rumors
Famous Nokia "killer" Elop (who was rumoured to to be one of the few canditates who would fight to keep XBox) has perhaps chaged his tune. There must be massive pressure coming from investors and board members. I think problem now is that there's no good option to sell XBox brand to some other company. They'd need to find company who has huge wealth reserves but would be interested to go into hazardious low margin biz.
http://www.theverge.com/2013/11/8/5080192/microsoft-ceo-candidate-stephen-elop-bing-xbox-rumors
Famous Nokia "killer" Elop (who was rumoured to to be one of the few canditates who would fight to keep XBox) has perhaps chaged his tune. There must be massive pressure coming from investors and board members. I think problem now is that there's no good option to sell XBox brand to some other company. They'd need to find company who has huge wealth reserves but would be interested to go into hazardious low margin biz.
It's not a low margin business, Live has huge margins ... the problem is that they are doing it at a point where the xbox brand is a bit of a low, on the other the market is nearing the apex of the Internet Bubble 2.0 so that's a bit of a wash. They'd have to be right quick though, after the bubble bursts everyone will be licking their wounds for years (although the half time of the duration in which European pension funds can't be suckered into another bubble is decreasing all the time, together with the pensions).
What they spent n the past is sunk money, no one in business should be concerning them selves with it except possibly as a lesson.
FWIW I don't think the re-org bode well for the XBox group, but I also don't think you'll see the fall out for years.
The issue with XBox at MS has nothing to do with current revenue/loss, at MS if you can't demonstrate the POTENTIAL to become a multi billion dollar business no one cares and you will eventually go away. If you can sell the potential they are an extraordinarily patient organization.
I think that mentality is some of why you see an obvious push towards a broader audience with XB1, the NFL network and ESPN adds in the US show no gameplay, just someone watching football on the XB1 and skyping his friend.
They are trying to make a broader entertainment play in a larger market, we'll see how that works out for them.
The EDD division has been profitable every year since fiscal year 2008. Im not sure how they are failing or its a distraction.
Especially given that their core business is doing fine and is highly profitable and has grown in the presence of the EDD division.
Furthermore, MS has a giant war chest thats grows quarterly so its not like EDD is stifling investment in other areas for MS.
MS isn't even struggling at all profit wise, only its share price. And that lies the problem. The motivation for pushing the sell off of Xbox or Bing has nothing to do with MS revenue and profit generation, but the desire of shareholders to see the value of their shares increase. Its a stock price manipulation move versus an improvement of the business. But the selling of Bing and Xbox isn't going to help current shareholders because prospective shareholders are repelled by MS inability to shift its core business in a way that takes advantage of the transition from PCs to more mobile platforms.
I highly doubt anyone would be attracted to the Xbox division anyway.
You'll get the name but I highly doubt MS would give away control of a derivative of the Windows OS or other MS based software that the Xbox ecosystem uses. Nor do I think MS would give up all the staff that make essential contributions to the Xbox but are employed outside that division.
You'll get the name but I highly doubt MS would give away control of a derivative of the Windows OS or other MS based software that the Xbox ecosystem uses. Nor do I think MS would give up all the staff that make essential contributions to the Xbox but are employed outside that division.
Live is only one side of the xbox business. I don't know if the guys is right about the royalties but no matter how the loss are split between winphone, xbox, etc. it is pretty bad.
There might lose some money as after 7 years and supposedly a couple of profitables years they decided to move away from subsidizing hardware, focus on tv and services => whatever money they are doing (or wrose losing) is not enough wrt risks and the size of the investments.
Now Elop wanting to focus on Office is pretty dumb... it is pretty much akin to throw the baby along with the water bath...
I know some people here likes the Xbox brand, my 360 served me well, but clearly MSFT is not focused enough and could make way more money.
Windows R&D is out of control (12 or 13% or their revenue 8O ) and there is no growth or potential growth left, the growth and revenue increase at msft in the last decade come some well leveraged buy out.
Winphone and windows RT are my favorite "light" OS (vs iOS, Android, chromeOS) but it doesn't sell enough, Google is on top. It is a situation tough to revert, if not impossible.
THey can do well but that sinking lots of money for few returns.
I wonder to which extend one can make huge profits in the living room. In a lot of countries MSFT is not only fighting Sony but a shit bunch of ISP and TV provider and there are the one with the primary access to the TV, XO hdmi in is a testament to that. A consequence is how fragmented is that segment, it is really tough to have a one size fits it all type of strategy.
There are plenty of costs along consoles, logistic, retailers relations, advertisments, funding exclusives, really I wonder to which extend it can be made into a high margin business.
On the other hand if MSFT IBMs it-self, they will crawl in money forever. I see the temptation here for investors and executives alike. This along with patent trolling, with 12/13% of their revenues going in Windows R&D I would not be surprised if they can suit Google, Apple, really whoever for decades. They might seat on an amount of patents so big they are not even fully grasping its extend.
I rose the issue of the how MSFT insists on fighting it-self, they push windows 8 against windows RT, they pushed xbox against PC gaming (making valve fortune in the mean time) and so on.
Whoever takes control of MSFT they are not going to kill Xbox now, they are going to see how it goes, so that type of rumors should be enough to make potential buyers wary... Another topic is who would buy Xbox? I'm not sure there would be lot of buyers, it really is a product intended for the USA, may some tv provider/ISP could be interested but I'm not even sure.
Anyway, I think that if MSFT were serious about RT, they would have made it so IHV stop selling laptop and desktop power by vanilla Windows for anything cheap (like starting in the upper mid range, anything below 800$ should be de facto RT powered).
With Windows refocused as both a professional product and for a niche of demanding technophile, it would have make sense to adopt a model akin to the one Valve is trying to get started with Steam OS.
We know that AMD has been working on Mantle for a while, even perfs could have been pretty neat.
The problem remains is there that much money to be made in the living room (when a lot of actors are already have their piece)? I wonder there is money to be make, but it require massive investments, it is risky and for the risks returns are not that high.
Interesting time, I would be surprised if Elop takes the seat and if MFT do such a bold move.
No matter the original articles is right or wrong, this Elop rumors is true or not, those are interesting times.
There are massive investment being done and disruption could come from many ends. Cliff Blezinski (spelling?) sum it up really nicely: it's going to be a blood bath.
I can't agree more, I can't see this gen going nicely for years without something happening, actually I'm not sure about what is going to be the reaction of the average gamers to the paywall both Sony and MSFT put on online MP.
There might lose some money as after 7 years and supposedly a couple of profitables years they decided to move away from subsidizing hardware, focus on tv and services => whatever money they are doing (or wrose losing) is not enough wrt risks and the size of the investments.
Now Elop wanting to focus on Office is pretty dumb... it is pretty much akin to throw the baby along with the water bath...
I know some people here likes the Xbox brand, my 360 served me well, but clearly MSFT is not focused enough and could make way more money.
Windows R&D is out of control (12 or 13% or their revenue 8O ) and there is no growth or potential growth left, the growth and revenue increase at msft in the last decade come some well leveraged buy out.
Winphone and windows RT are my favorite "light" OS (vs iOS, Android, chromeOS) but it doesn't sell enough, Google is on top. It is a situation tough to revert, if not impossible.
THey can do well but that sinking lots of money for few returns.
I wonder to which extend one can make huge profits in the living room. In a lot of countries MSFT is not only fighting Sony but a shit bunch of ISP and TV provider and there are the one with the primary access to the TV, XO hdmi in is a testament to that. A consequence is how fragmented is that segment, it is really tough to have a one size fits it all type of strategy.
There are plenty of costs along consoles, logistic, retailers relations, advertisments, funding exclusives, really I wonder to which extend it can be made into a high margin business.
On the other hand if MSFT IBMs it-self, they will crawl in money forever. I see the temptation here for investors and executives alike. This along with patent trolling, with 12/13% of their revenues going in Windows R&D I would not be surprised if they can suit Google, Apple, really whoever for decades. They might seat on an amount of patents so big they are not even fully grasping its extend.
I rose the issue of the how MSFT insists on fighting it-self, they push windows 8 against windows RT, they pushed xbox against PC gaming (making valve fortune in the mean time) and so on.
Whoever takes control of MSFT they are not going to kill Xbox now, they are going to see how it goes, so that type of rumors should be enough to make potential buyers wary... Another topic is who would buy Xbox? I'm not sure there would be lot of buyers, it really is a product intended for the USA, may some tv provider/ISP could be interested but I'm not even sure.
Anyway, I think that if MSFT were serious about RT, they would have made it so IHV stop selling laptop and desktop power by vanilla Windows for anything cheap (like starting in the upper mid range, anything below 800$ should be de facto RT powered).
With Windows refocused as both a professional product and for a niche of demanding technophile, it would have make sense to adopt a model akin to the one Valve is trying to get started with Steam OS.
We know that AMD has been working on Mantle for a while, even perfs could have been pretty neat.
The problem remains is there that much money to be made in the living room (when a lot of actors are already have their piece)? I wonder there is money to be make, but it require massive investments, it is risky and for the risks returns are not that high.
Interesting time, I would be surprised if Elop takes the seat and if MFT do such a bold move.
No matter the original articles is right or wrong, this Elop rumors is true or not, those are interesting times.
There are massive investment being done and disruption could come from many ends. Cliff Blezinski (spelling?) sum it up really nicely: it's going to be a blood bath.
I can't agree more, I can't see this gen going nicely for years without something happening, actually I'm not sure about what is going to be the reaction of the average gamers to the paywall both Sony and MSFT put on online MP.
