I think Office is their money maker
Microsoft Business (Office), Windows and Server & Tools divisions are their money makers. Everything else is chump change in comparison.
I think Office is their money maker
Yeah, I'm not buying this. All the investor data doesn't show this and this isn't the most trust worthy a article. There's no hard data or any source to back this up. All the hard data show the xbox brand making nice profits since 2008. Dunno what the analyst is trying to pull.
Well, MS does moneyhat like no tomorrow. Yearly COD co-marketing/DLC exclusivity deals have gotta cost a small fortune.
Rick Sherlund is even closer to Microsoft than that. He's close friends with Bill Gates and his family, dating back to when he worked at Goldman Sachs.
This guy has no clue what he's talking about. Losing money on what? The hardware is profitable. Xbox Live Gold memberships are basically free money. Royalties cost them almost nothing and bring in huge cash for the unit. They're certainly not spending Billions on first party software development. It's no secret they used the division to huge craters in their balance sheet like Windows Phone and the Kin, but they usually slush the money over from Xbox, not the other way around.
Dude is a personal friend of bill gates and was a senior analyst at GS. He probably knows a bit better than you.
So the title says xbox, but it's all the electronics division combined (Zune/Windows phone etc.)
It's like combining the electronics division for Sony (PS3, TV's etc.) and saying "Playstation is losing X".
RTFA, it's $2.5b for the total division and $2b for the xbox endeavour.
That means that they're losing more money on this than shit like Bing
So what's the plan for Mulally when he takes over Microsoft? In Sherlund's mind, it's time to dump two major anchors Bing and Xbox. Combined, he thinks Bing and Xbox are losing $3-$4 billion a year, which is a $0.30-$0.40 drag on EPS.
He thinks Microsoft should give away or sell Bing, and spin out or sell Xbox.
It's not just that they lose money, either. He says, "The even bigger issue is that this business does not drive traction in smartphones or tablets and does not contribute to PC demand or enterprise products. They are not strategic and are a costly sideshow."
They're losing billions on Bing too according to Sherlund.
http://www.businessinsider.com/nomura-note-on-the-future-of-microsoft-2013-11
They're losing billions on Bing too according to Sherlund.
http://www.businessinsider.com/nomura-note-on-the-future-of-microsoft-2013-11
You're absolutely right, brain fart on my part.
Actually if the xbox market is such a burden it makes Ballmer departure even more logical...
Other posters seem to be mentioning this and the ppl keep ignoring it so saying it 1 more time won't hurt
Other posters seem to be mentioning this and the ppl keep ignoring it so saying it 1 more time won't hurt
In Sherlund's mind, it's time to dump two major anchors Bing and Xbox. Combined, he thinks Bing and Xbox are losing $3-$4 billion a year,
Indeed. The lost opportunity cost is probably a bigger deal, though. Imagine if Microsoft had invested all that Xbox money and talent into Windows Phone/tablets instead. They'd be in a much better position for the future.
So they've been profitable since 2008?
What the fuck is the writer of this piece smoking with this '2 billion a year in the red' narrative?
Since they were focused on the failing game market (sorry guys this is what it is) they're getting marginalized on their more lucrative businesses.
They're facing stiffer competitions than ever in their Office and Windows lines.
If semiaccurate is to be believed, their server business is floundering and need serious investment to be salvageable even.
They totally missed the whole mobile revolution of the last few years and they're now in a market where basically they can't leverage their main strength to make headways in the tab market (the market that is eating the life out of regular pc sales).
I'm not even sure their cloud solution is that competitive considering the competition.
That exclusive DLC doesn't come for free. They've spent all this time on "You've got to spend money" but they haven't quite made it to "make money" yet.
It seems any negative news about Microsoft at the moment is taken at face value... If the 360 isn't making money at the moment with Xblg subscription and a significantly higher attach rate than the ps3, surely this industry cannot be profitable..
So they've been profitable since 2008?
What the fuck is the writer of this piece smoking with this '2 billion a year in the red' narrative?
Read what he's saying.
He's saying that the Android royalties are bringing in $2 billion a year. Microsoft is using this $2 billion to offset the losses of the 'entertainment and devices division', making it look healthier than it is.
100% agreed, and it's all down to Ballmer. While I'm sure he's good with numbers, it's obvious that he has no vision.
Remember this? http://www.youtube.com/watch?v=eywi0h_Y5_U
Says it all, really.
It seems any negative news about Microsoft at the moment is taken at face value... If the 360 isn't making money at the moment with Xblg subscription and a significantly higher attach rate than the ps3, surely this industry cannot be profitable..
There is no way they'd keep it going if they were losing that much.
Either Microsoft are bad at business or that article is bollocks.
My money's on the second one.
And the Android royalties should go where then exactly? It is just FUD.
So basically MS makes more money in patent trolling, and Sony made more in insurance.
And the Android royalties should go where then exactly? It is just FUD.
They built a facility to test the controller.
As far as I know, MS have never published the opertaing profit/loss for Xbox. It has always been grouped in with other products/divisions.
Entertainment & Devices is the current division that contains Xbox, and its profitable. But as per the OP, thats due to the $2B patent troll profits, which obstificates the staggering Xbox losses.
Compare to Nintendo and Sony, who always report directly their gaming revenue and opertaing profit / loss.
As far as I know, MS have never published the opertaing profit/loss for Xbox. It has always been grouped in with other products/divisions.
Entertainment & Devices is the current division that contains Xbox, and its profitable. But as per the OP, thats due to the $2B patent troll profits, which obstificates the staggering Xbox losses.
Compare to Nintendo and Sony, who always report directly their gaming revenue and opertaing profit / loss.
And the Android royalties should go where then exactly? It is just FUD.
You can't blow 2 billion on like 3 games a year, advertising, and exclusive contracts for DLC and the odd game. It must be ALL R&D if it's true, in which case, I can't imagine the kind of stupid shit they're trying and failing at.
Fair enough.
I don't see how it's possible they're blowing 2 Billion a year on Xbox. They've basically been selling the 360 hardware at a profit since at least 2008, they make licensing fees off every game published on the platform, they barely make any first party software and all of it tends to sell well (Halo, Forza, Fable, Kinect shit), plus Live subscription fees and ad revenue.
You can't blow 2 billion on like 3 games a year, advertising, and exclusive contracts for DLC and the odd game. It must be ALL R&D if it's true, in which case, I can't imagine the kind of stupid shit they're trying and failing at.
Read what he's saying.
He's saying that the Android royalties are bringing in $2 billion a year. Microsoft is using this $2 billion to offset the losses of the 'entertainment and devices division', making it look healthier than it is.
If we trust Microsoft's own numbers, you can get also make a pretty sizable dent. See the $500m prelaunch blitz for Kinect or the $1bn of development and marketing support for launch-window Xbone titles, a number which was thrown around BEFORE Titanfall exclusivity.
Did you miss the whole Kinect 1 on xbox?
That was basically a console launch right there with all the cost attached on it.
That couldn't possibly have been cheap.