Crytek are going to announce a huge license deal. Maybe it will reinstate the studio.

[Deleted member 11852]

Well yes I was really talking revenues when I wrote that they always made lots of money. Then I also specified they squandered it all on silly projects.

Revenue isn't profit. Profit = revenue - operating costs like paying 154,000 employees (plus tens of thousands of short-term contractors) and running costs for all of their facilities and computer centres.

I believe Amazon have the worst revenue : profit ratio of pretty much any company listed on any stock exchange anywhere in the known galaxy. It actually takes real effort to channel so much revenue through your company and yet not make money just from short term interest!

 

[London Geezer]

Revenue isn't profit. Profit = revenue - operating costs

Very aware of that, grampa!

Even more impressive is how they basically pay no tax in most countries and still they manage to overspend and make a loss.

 

[Prophecy2k]

Revenue isn't profit. Profit = revenue - operating costs like paying 154,000 employees (plus tens of thousands of short-term contractors) and running costs for all of their facilities and computer centres.

I believe Amazon have the worst revenue : profit ratio of pretty much any company listed on any stock exchange anywhere in the known galaxy. It actually takes real effort to channel so much revenue through your company and yet not make money just from short term interest!

On the other hand, they could be seen as a company that generates billions in revenue and channels the majority of it into it's workforce, paying back little to the rich fat cats on Wall Street. I mean that's 154,000 jobs Amazon has created, 154,000 families that Amazon salaries feed. Profit making or not, I can't fault them wholly.

 

[Jwm]

We have a warehouse in our city, oddly nothing I order has ever shipped from it. (??) I would love to take a tour as the thing is huge, and while they were building it the doors were open until they started adding the automation stuff. My wife has their staff in her office from time-to-time and they all seem happy and impressed with the op. Granted Amazon is not afraid to fail, and actively tries things that have a high risk of failure or success. It has to be mad to try and keep the shareholders from wanting to fire you on a weekly basis, I would just not want to be a public company under the model Bezos manages.

Edit: Crytek thing is interesting, has more info come out yet on what it is related to? Does Crytek handle anything drone related on their military side?

 

[London Geezer]

On the other hand, they could be seen as a company that generates billions in revenue and channels the majority of it into it's workforce, paying back little to the rich fat cats on Wall Street. I mean that's 154,000 jobs Amazon has created, 154,000 families that Amazon salaries feed. Profit making or not, I can't fault them wholly.

Just remembered I was actually contacted for quite a good job there some time ago and let's just say, it was a very, very good package.
And you all know how I love good packages.

 

[Shortbread]

And you all know how I love good packages.

 

[Deleted member 11852]

On the other hand, they could be seen as a company that generates billions in revenue and channels the majority of it into it's workforce, paying back little to the rich fat cats on Wall Street. I mean that's 154,000 jobs Amazon has created, 154,000 families that Amazon salaries feed. Profit making or not, I can't fault them wholly.

You say like investors care about this, they don't. They care about growth and revenue leading to margins and profit and, ultimately, dividends and valuable stock. Amazon is a 20 year con of Wall Street with Jeff Bezos regularly promising their next venture delivering actual profits.

The billions in revenue has to be reinvested back into stock that Amazon sell through e-commerce (or this entire business will collapse within days) and expansion of AWS which just turned its first profit. But servers is becoming and increasingly crowded market with competition from Microsoft and Google driving prices down.

Amazon barely survive on super low margins and they have no room to manoeuvre. Unless they can find a lucrative market they are financially, the walking dead. 20 years of life support isn't making that company profitable by any appreciable Wall Street metric.

 

[AlNom]

That's another possibility, but why commission Crytek to do that? Is there experience and success in the mobile space that good? Heck, even their console success isn't that great.

Crysis 4:

Nano transactions suit for maximum profit. The suit's name is Profit.


"They call me Profit. Pay for me."


Proffiiiiiiiiiit!!!!!!

 

[Shifty Geezer]

"Please insert a dollar to activate stealth mode for 3 minutes"

 

[milk]

You say like investors care about this, they don't. They care about growth and revenue leading to margins and profit and, ultimately, dividends and valuable stock. Amazon is a 20 year con of Wall Street with Jeff Bezos regularly promising their next venture delivering actual profits.

Amazon barely survive on super low margins and they have no room to manoeuvre. Unless they can find a lucrative market they are financially, the walking dead. 20 years of life support isn't making that company profitable by any appreciable Wall Street metric.

Suddenly Crytek's relationship with Amazon makes a lot of sense to me. It's like, these guys were made for each other! When are they gonna hire mr. Molyneux as lead designer for their secret project?

 

[BRiT]

You say like investors care about this, they don't. They care about growth and revenue leading to margins and profit and, ultimately, dividends and valuable stock. Amazon is a 20 year con of Wall Street with Jeff Bezos regularly promising their next venture delivering actual profits.

The billions in revenue has to be reinvested back into stock that Amazon sell through e-commerce (or this entire business will collapse within days) and expansion of AWS which just turned its first profit. But servers is becoming and increasingly crowded market with competition from Microsoft and Google driving prices down.

Amazon barely survive on super low margins and they have no room to manoeuvre. Unless they can find a lucrative market they are financially, the walking dead. 20 years of life support isn't making that company profitable by any appreciable Wall Street metric.

They sure operate better than Yahoo or many of the other WallStreet companies.

Also, Amazon didn't IPO until May 15, 1997, so not an entire full 20 year con of WallStreet unless you're saying it started 25 months earlier leading up on to the IPO.

 

[London Geezer]

http://www.ft.com/cms/s/0/faf68dc6-a7fe-11e4-be63-00144feab7de.html#ixzz3WjtUjYBH

Amazon is not “bulletproof”, said Mr Wingo, but competing with Amazon is difficult, and the fact that its sales growth far exceeds the wider ecommerce market suggests it is taking market share.

They have always seemed to me like a great business that just spends a bit too much.

 

[Deleted member 11852]

Also, Amazon didn't IPO until May 15, 1997, so not an entire full 20 year con of WallStreet unless you're saying it started 25 months earlier leading up on to the IPO.

By Wall Street I mean investors. Amazon was founded in 1995 with investment from Bezos's parents and funding from venture capitalist firm, Kleiner Perkins Caufield & Byers. This is well documented history recounted publicly (on a few occasions) by Bezos himself. Even when Amazon was floated in 1997 Bezos's proposition was no profits for the first five years - probably the only income prediction Jeff Bezos was ever accurate about

 

[Deleted member 11852]

They have always seemed to me like a great business that just spends a bit too much.

Out of curiosity - because I've looked at Amazon as an investment opportunity and written off despite being an avid customer - what information are you looking at in terms of financial reports that leads you to believe they are spending too much money? They seem to exist on a shoestring operational budget from what I've seen.

 

[London Geezer]

They can make a profit and have made a profit in the past. Some businesses don't have the luxury of 30% profits like Apple, so when Amazon overspends, things get tight. Well, they're always tight.

 

[Deleted member 11852]

They can make a profit and have made a profit in the past. Some businesses don't have the luxury of 30% profits like Apple, so when Amazon overspends, things get tight. Well, they're always tight.

I'm not debating Amazon have turned in a few profitable years, I listed a few in an earlier post, but on the grand scoreboard of cumulative profits vs. losses, they're in the red. But I really asking why think they're spending/over-spending. I couldn't see anything particularly in their annuals. Even the Kindle Fire and the Fire phone seems to be researched and developed on a minuscule budget that didn't stand out on the balance sheets.

You can see Amazon's profit/loss margins here. These types of margins are unheard of and are why Amazon lose more than they earn.

 

[London Geezer]

I never delved deep in their financial statements. My point was more of a common sense one. A company with tens of billions in revenues and either tiny margins or losses is probably overspending. That's all. Either that or their model is a failure, which would be unusual at this point.

I work in an industry where 5% profit is huge. My company made a loss in its first 10 years of life, and for us, 4% is a profit target that is reached only by constant and somewhat painful vigilance of costs.

Some businesses have models which won't allow huge profits. I just always had the impression that Amazon's model was solid.

Anyway. Crytek!

 

[Deleted member 11852]

I never delved deep in their financial statements. My point was more of a common sense one. A company with tens of billions in revenues and either tiny margins or losses is probably overspending. That's all. Either that or their model is a failure, which would be unusual at this point.

Amazon's model isn't a failure per se, it's just not very profitable - that's the nature of competetive retail (where most of Amazon's revenue lies). My point is Amazon aren't skating by because they are over-spending because there is no evidence of this in financial reports, Amazon's low profits are endemic of existing only in low-end low-profit margin markets where volume is the only keep keeping them afloat and just barely. When you look the products Amazon have put out, particularly the Kindle Fire and Fire phone, their R&D spend is barely noticeable compared to their competition.

But Amazon have 154,000 employees (plus many contractors) and hundreds and hundreds of facilities around the globe with rent and utilities and those are some huge overheads. They still operate like a startup but that ave the infrastructure of a conglomerate. Amazon has 50k more employees than Apple and 25k more than Microsoft!

I work in an industry where 5% profit is huge. My company made a loss in its first 10 years of life, and for us, 4% is a profit target that is reached only by constant and somewhat painful vigilance of costs.

And this is the nature of a lot of industries these days, but when your margins are that low and you exist in a competitive market (which is every market Amazon exists in), a competitor biting down on pricing can wipe out profits as happens quite a lot for Amazon. If you tried to sell such a business model to bank (or investors) these days, you'd find it tough to get investment on a business model of 5% margins unless your volume is mammoth-sized.

Wall Street has tolerated Amazon because they have demonstrated that they can diversify into new markets and they have good and positive brand awareness. Wall Street hopes that Amazon will come up with some product/market they can capitalise on and bring their existing customers too but after 20 years, Wall Street's patience seems to be growing thin.

 

[dobwal]

Free shipping ain't free.

Amazon is concentrating on expansion of revenue versus expansion of profit margin. Its willing to lose money in an effort to drive up its consumer base.

 

[Prophecy2k]

Amazon's model isn't a failure per se, it's just not very profitable - that's the nature of competetive retail (where most of Amazon's revenue lies). My point is Amazon aren't skating by because they are over-spending because there is no evidence of this in financial reports, Amazon's low profits are endemic of existing only in low-end low-profit margin markets where volume is the only keep keeping them afloat and just barely. When you look the products Amazon have put out, particularly the Kindle Fire and Fire phone, their R&D spend is barely noticeable compared to their competition.

But Amazon have 154,000 employees (plus many contractors) and hundreds and hundreds of facilities around the globe with rent and utilities and those are some huge overheads. They still operate like a startup but that ave the infrastructure of a conglomerate. Amazon has 50k more employees than Apple and 25k more than Microsoft!



And this is the nature of a lot of industries these days, but when your margins are that low and you exist in a competitive market (which is every market Amazon exists in), a competitor biting down on pricing can wipe out profits as happens quite a lot for Amazon. If you tried to sell such a business model to bank (or investors) these days, you'd find it tough to get investment on a business model of 5% margins unless your volume is mammoth-sized.

Wall Street has tolerated Amazon because they have demonstrated that they can diversify into new markets and they have good and positive brand awareness. Wall Street hopes that Amazon will come up with some product/market they can capitalise on and bring their existing customers too but after 20 years, Wall Street's patience seems to be growing thin.

Amazon is almost the Microsoft or Google of Online Retailers. They're in a unique almost monopolistic position. I'm sure as a company they're not going anywhere. Jeff Bezos on the other hand... well... that's another issue