With respect, if you don't care about this stuff then bail out of this discussion (or just ignore my posts) because it's wholly relevant to the thread topic: what should Microsoft do next? The possible and probable options will vary depending on Xbox Division as ongoing business having: 1) incurred huge losses 2) incurred some losses, 3) broken even, 4) made some profit or 5) made huge profits.
The question of Xbox Divisions's profitability is one of the biggest mysteries in modern gaming and a lot more people than me would like this mystery to be solved.
I care about good analysis and trusted reports. Your first source (forbes article) was complete nonsense since the author even didn't understand the difference between total revenue and increase/decrease of revenue. He concluded in first place that Xbox made $400m in lose and founded his article on this fact (in his mind) and suddenly after realizing his mistake he changed his words:
While we can use that data to approximate $7.1B in revenues compared to $5B in costs, without further information from Microsoft, it’s hard to pinpoint an exact profit or loss on the Xbox One. Though if they have lost money on the system so far, it’s for the reasons I go into below, and would not be cause for alarm.
It's disgusting. If he don't know that Microsoft is losing money (or not) on Xbox then why he should write an article like this in the first place?
Your second and third sources (which are one and two year old, respectively) are questioning Xbox, Surface and Bing importance to Microsoft etc. and trying to find Nadella's next move. Microsoft is investing more money in this products and they seems to show satisfactory results:
“Our approach to investing in areas where we have differentiation and opportunity is paying off with Surface, Xbox, Bing, Office 365, Azure and Dynamics CRM Online all growing by at least double-digits,” said Satya Nadella, chief executive officer at Microsoft. "And the upcoming release of Windows 10 will create new opportunities for Microsoft and our ecosystem.”
http://www.microsoft.com/investor/E...s/PressReleaseAndWebcast/FY15/Q4/default.aspx
Your point of view is different than mine. I'm not questioning Xbox's profitability, since software and service wise it's doing very well and all signs were positive so far. I don't care about some dated rumors or weak analyses. Microsoft is after differentiating itself and Xbox could help them. Hololens started at Xbox, cloud computing cames from Xbox, resonating with users request for windows and other Microsoft product & services cames from Xbox etc. . Xbox is more than gaming at Microsoft. I want to see Xbox financial results in detail like you but I don't think that Microsoft hides only Xbox results (as I shown you information are the same for Surface and Xbox) and I don't jump at it like they are doing this because Xbox is losing money. I only think that their approach to financial reports is deferent than Sony, nothing more.
It's interesting you see Phil Spencer's change in role to Head of Gaming (is that the official title?) as a positive thing because speaking as somebody who has had additional responsibility heaped upon them, this just meant I had less time to spend on my original job. On the plus side it gave me new perspective and that wasn't always necessarily a good thing for the old job at macro-organisation level. Things that looked like clear priorities suddenly were lower priorities compared to other initiatives.
It's not an official title since Xbox is the gaming at Microsoft, but it isn't anymore only about Xbox consoles. They have enough resources and tools (ID@XBOX, Xbox Live, unified store and Microsoft's in-house studios and 2nd & 3rd Party studios relationship) and they are spending more money on Xbox as a service for their ecosystem on all Windows 10 platforms. This could be good for Xbox consoles, too.
Math is a part of it, but I think the problem is more your reasoning
you say Xbox hardware = $946 million with 1.4 million shipped which if you do the math works out to be $675 per console.
Now the average xbox1 is prolly ~$325 and xb360 ~$150 (remember these prices will be lower than the RRP price as its the price MS sells it to a shop), say on average $275 per console
So where is all these extra hundreds of dollars of hardware per console coming from? Is everyone buying 7+ gamepads? I think not (*)
then you state MS earns 70% of what sony earns! Mate just thinking about it quickly you would realize 1.4 million for xb1 & 360 combined is less than half of 3 million ps4's shiped (not even counting ps3) you combine this with the lower average RRP of the MS consoles vs sony ones, shows your reasoning or logical is flawed
(*)$275 console & $400 on other hardware, so you're claiming accessories are worth much more than consoles in dollars value but if you look at NPD etc you will see this is in fact the opposite of what they actually report
It wasn't clearly explained in financial report, I found this explanation later:
https://forum.beyond3d.com/posts/1866380/
Computing and Gaming Hardware: Xbox gaming and entertainment consoles and accessories, second-party and third-party video game royalties, and Xbox Live subscriptions ==> revenue = $946 million
D&C Other: Xbox Live transactions (revenue increased $205 million or 58%); Studios, comprising first-party video games; Mojang (revenue increased $63 million or 62%) ==> revenue = $723 million
Since when is eastmen a reliable source around here? With all due respect, some of the stuff he comes up with belongs in parallel fantasy universes.
He was correct about XB1 CPU clock being higher than 1.6GHz, I'm not following him but I remember that his source for XB1 BOM was the same person. Sure, this might be not true but the whole design philosophy behind XB1 (at least memory system) was to be cheaper than competition, not more expensive.
